Question :

The results of operations for the Beca Bug Spray Manufacturing Company for the fourth quarter of 2017 were as follows (in thousands):

Sales of bug spray

$570,000Less variable cost of goods sold

319,200Contribution margin

250,800

Less fixed bug removal costs

$79,800

Less fixed selling and administrative expenses

34,200114,000Income before taxes

136,800Less taxes on income

54,720Net income

$82,080

Note:Beca 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):

Assets:

Cash

$26,700Accounts receivable

342,000Total current assets

368,700

Fixtures and equipment

$120,000Less accumulated depreciation

70,00050,000Total assets

$418,700

Liabilities and owners' equity:

Accounts payable

$63,840Retained earnings

248,860Common stock

106,000Total liabilities and owners' equity$418,700

Additional information:

1.Sales and variable costs of sales are expected to increase by 4 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 the expenses are incurred.4.Fixed bug removal costs (other than $5,290 of depreciation expense) are expected to increase by 1.00 percent. Fixed bug removal costs requiring payment are paid in the quarter they are incurred.5.Fixed selling and administrative costs (other than $2,720 of depreciation expense) are expected to increase by 3 percent. Fixed selling and administrative costs requiring payment are paid in 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. Beca Bug Spray Manufacturing Company Budgeted Income Statement C E $ E E E E E C $Prepare a budgeted statement of cash budget for the first quarter of 2018. Beca Bug Spray Manufacturing Company Cash Budget For the First Quarter, 2018 C O : E O EPrepare a budgeted balance sheet as of the end of the first quarter of 2018. (List assets in order of liquidity.) Beca Bug Spray Manufacturing Company Budgeted Balance Sheet Assets C LA $ Liabilities and Stockholders' Equity O $ Click if you would like to Show Work for this question: Open Show Work