Prepare a budget for Sheridan Inc.'s first quarter of FY 2019

Using the Sheridan Inc. Consolidated Statements of Earnings shown below, Prepare a budget for Sheridan Inc.'s first quarter of FY 2019. December 2018 sales totaled $27,950. First quarter sales are expected to decrease by 10% in January, 10% in February, and then 5% in March. Cost of goods sold is 40% of net sales. Selling and administrative expenses, budgeted annually on a three-year rolling average, in January historically account for 8% of the annual amount, with February and March accounting for 7% each. Advertising is also budgeted annually on a three-year rolling average and budgeted equally month-to-month. Depreciation and amortization are expected to be $6,505,000 in 2019 and is budgeted equally throughout the year. Interest income, expected to be $865,000, and interest expense, expected to be $5,650,000, both accrued monthly. Income taxes are due in December and are accrued on a monthly basis The budgeted tax rate is 40%

Sheridan Inc. Consolidated Statements Budget Fiscal Year 2019 First Quarter Net sales Cost of goods sold Gross prot Selling and administrative expemses Advertising Depreciation and amortization Operating prot Other income (expense) Interest income Interest expense Earnings before income taxes Provision for income taxes Net earnings Sheridan Inc. Consolidated Statements of Earnings for the Years Ended December 31, 2016, 2017, 2018 (in Thousands) 2016 2017 2018 Net sales $ 433,812 $ 303,150 $ 335,411 Cost of goods sold 170,922 121,866 137,183 Gross prot 262,890 181,284 198,228 Selling and administrative expemses 95,439 63,662 72,113 Advertising 30,3 67 21,221 24,693 Depreciation and amortization 8,242 5,760 6,3 73 Operating prot 128,842 Other income (expense) Interest income 846 Interest expense (5,210) Earnings before income taxes 124,478 Provision for income taxes 49,791 Net earnings $ 51,760 $