*Problem 10-42A (Part Level Submission)

Kurian Industries' balance sheet at December 31, 2015, is presented below.

	KURIAN INDUSTRIES Balance Sheet December 31, 2015
	Assets
	Current assets
	Cash			$7,490
	Accounts receivable			82,000
	Finished goods inventory (2,500 units)			29,700
	Total current assets			119,190
	Equipment	$40,200
	Less: Accumulated depreciation	10,300		29,900
	Total assets			$149,090
	Liabilities and Shareholders' Equity
	Liabilities
	Notes payable			$24,700
	Accounts payable			44,700
	Total liabilities			69,400
	Shareholders equity
	Common stock	$50,000
	Retained earnings	29,690
	Total shareholders equity			79,690
	Total liabilities and shareholders equity			$149,090

Budgeted data for the year 2016 include the following.

		Q4 of 2016			Year 2016 Total
	Sales budget (8,500 units at $39)	$99,450			$331,500
	Direct materials used	16,600			69,700
	Direct labor	12,400			56,000
	Manufacturing overhead applied	10,700			35,800
	Selling and administrative expenses	17,900			75,700

To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2016, the production budget shows 8,500 required units of output. The total unit cost of production is expected to be $19. Kurian Industries uses the first-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $4,300 for depreciation on equipment. The company expects interest expense to be $3,700 for the year and income taxes to be 30% of income before income taxes. All sales and purchases are on account. The company expects to collect 60% of the quarterly sales in cash within the quarter and the remainder in the following quarter. It pays direct materials purchased from suppliers 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2016, the company expects to purchase additional equipment costing $17,700. It expects to pay $8,100 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,700, above). Accounts payable at December 31, 2016, includes amounts due to suppliers (see above) plus other accounts payable of $6,000. In 2016, the company expects to declare and pay a $4,800 cash dividend. Unpaid income taxes at December 31 will be $9,756. The company's cash budget shows an expected cash balance of $60,846 at December 31, 2016.

*(a1) Prepare a budgeted income statement for 2016. In preparing the income statement, you will need to calculate the cost of goods manufactured (materials + labour + overhead) and finished goods inventory (December 31, 2016). (Round answers to 0 decimal places, e.g. 125.)

KURIAN INDUSTRIES Budgeted Income Statement For the Year Ending December 31, 2016 Sales Cost of goods sold Finished goods inventor Cost of goods manufact Cost of goods available Finished goods inventory Gross profit Selling and administrativ Income from operations Interest expense Income before income ta Income tax expense Net income