Problem 10-2 The results of operations for the Uli Bug Spray Manufacturing Company for the fourth quarter of 2017 were as follows (in thousands): $590,000 330,400 259,600 Sales of bug spray Less variable cost of goods sold Contribution margin Less fixed bug removal costs Less fixed selling and administrative expenses Income before taxes Less taxes on income Net income $82,600 35,400 118,000 141,600 56,640 $84,960 Note: Uli uses the variable costing method. Thus, only variable costs are included in the cost of goods sold. Fixed costs are charged to expense in the period incurred. The company's balance sheet as of the end of the fourth quarter of 2017 was as follows (in thousands): $ 28,600 354,000 382,600 Assets: Cash Accounts receivable Total current assets Fixtures and equipment $130,000 Less accumulated depreciation 70,000 Total assets Liabilities and owners' equity: Accounts payable Retained earnings Common stock Total liabilities and owners' equity 60,000 $442,600 $ 66,080 267,920 108,600 $442,600 Additional information: 1. Sales and variable costs of sales are expected to increase by 3 percent in the next quarter. 2. All sales are on credit with 40 percent collected in the quarter of sale and 60 percent collected in the following quarter. 3. Variable cost of sales consists of 40 percent materials, 38 percent direct labor, and 22 percent variable overhead. Materials are purchased on credit. 50 percent are paid for in the quarter of purchase, and the remaining amount is paid for in the quarter after purchase. There is no inventory. Also, direct labor and variable overhead costs are paid in the quarter expenses are incurred. 4. Fixed bug removal costs (other than $4,760 of depreciation expense) are expected to increase by 2.00 percent. Fixed bug removal costs requiring payment are paid in the quarter they are incurred. 5. Fixed selling and administrative costs (other than $2,920 of depreciation expense) are expected to increase by 2 percent. Fixed selling and administrative costs requiring payment are paid the quarter they are incurred. 6. The tax rate is expected to be 40 percent. All taxes are paid in the quarter they are incurred. 7. No purchases of fixtures or equipment are expected in the first quarter of 2018. Prepare a budgeted income statement for the first quarter of 2018. Uli Bug Spray Manufacturing Company Budgeted Income Statement V Prepare a budgeted statement of cash budget for the first quarter of 2018. Uli Bug Spray Manufacturing Company Cash Budget For the First Quarter, 2018 $ $ Prepare a budgeted balance sheet as of the end of the first quarter of 2018. (List assets in order of liquidity.) Uli Bug Spray Manufacturing Company Budgeted Balance Sheet Assets Liabilities and Stockholders' Equity Click if you would like to Show Work for this question: Open Show Work