The results of operations for the Canarie Bug Spray Manufacturing Company for the fourth quarter of 2017 were as follows (in thousands): $530,000 296,800 233,200 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 $74,200 31,800 106,000 127,200 50,880 $76,320 Note: Canarie 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): $ 27,200 265,000 292,200 Assets: Cash Accounts receivable Total current assets Fixtures and equipment $130,000 Less accumulated depreciation 85,000 Total assets Liabilities and owners' equity: Accounts payable Retained earnings Common stock Total liabilities and owners' equity 45,000 $337,200 $ 71,232 157,068 108,900 $337,200 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 50 percent collected in the quarter of sale and 50 percent collected in the following quarter. 3. Variable cost of sales consists of 40 percent materials, 36 percent direct labor, and 24 percent variable overhead. Materials are purchased on credit. 40 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 $5,020 of depreciation expense) are expected to increase by 1.50 percent. Fixed bug removal costs requiring payment are paid in the quarter they are incurred. 5. Fixed selling and administrative costs (other than $2,710 of depreciation expense) are expected to increase by 2 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 balance sheet as of the end of the first quarter of 2018. (List assets in order of liquidity.) Canarie Bug Spray Manufacturing Company Budgeted Balance Sheet For the Quarter Ended March 31, 2018 Assets Current Assets Accounts Recievable $ $ Total Current Assets Fixtures & Equipment Add .: Credit Sales Total Assets Liabilities and Stockholders' Equity Net Income / (Loss) Total Liabilities and Stockholders' Equity v