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The results of operations for the Paver Manufacturing Company for the fourth quarter of 2020 were as follows: Sales $ 484,000 Less variable cost of sales 292,000 192,000 $ 104,000 48,000 152.000 Contribution margin Less fixed production costs Less fixed selling and administrative expenses Income before taxes Less taxes on income Net income 40,000 16,000 $ 24,000 Note: Paver Manufacturing uses the variable costing method. Thus, only variable production costs are included in inventory and cost of goods sold. Fixed production costs are charged to expense in the period incurred. The company's balance sheet as of the end of the fourth quarter of 2020 was as follows: Assets: Cash $ 140,000 Accounts receivable 192.000 340,000 672,000 388,000 Inventory Total current assets Property, plant, and equipment Less accumulated depreciation Total assets Liabilities and owners equity: Accounts payable 96,000 $ 964,000 56,800 Common stock 476,000 Retained earnings 431,200 Retained earnings 431,200 Total liabilities and owners' equity $ 964,000 Additional information: 1. 2. 3. Sales and variable costs of sales are expected to increase by 12 percent in the next quarter. All sales are on credit with 60 percent collected in the quarter of sale and 40 percent collected in the following quarter. Variable cost of sales consists of 40 percent materials, 40 percent direct labor, and 20 percent variable overhead. Materials are purchased on credit. Fifty percent are paid for in the quarter of purchase, and the remaining amount is paid for in the quarter after purchase. The inventory balance is not expected to change. Also, direct labor and variable overhead costs are paid in the quarter the expenses are incurred. Fixed production costs (other than $7,000 of depreciation expense) are expected to increase by three percent. Fixed production costs requiring payment are paid in the quarter they are incurred. Fixed selling and administrative costs (other than $5,000 of depreciation expense) are expected to increase by two percent, Fixed selling and administrative costs requiring payment are paid in the quarter they are incurred, The tax rate is expected to be 20 percent. All taxes are paid in the quarter they are incurred. No purchases of property.plant, or equipment are expected in the first quarter of 2021. 4. 5. 6. 7 (a) Prepare a budgeted income statement for the first quarter of 2021 Paver Manufacturing Company Budgeted Income Statement Prepare a budgeted income statement for the first quarter of 2021 Paver Manufacturing Company Budgeted Income Statement March 31, 2021 For the Year Ended March 31, 2021 For the Quarter Ended March 31, 2021 $ $ e Textbook and Media List of Accounts Save ater Attempts: 0 of 3 used Submit Answer Prepare a budgeted income statement for the first quarter of 2021. Paver Manufacturing Company Budgeted Income Statement $ Sales Net income/(loss) Fixed production costs Fixed selling and administrative expenses Taxes on income Contribution margin Income before taxes Variable cost of sales e Textbook and Media List of Accounts Save for Later Attempts: 0 of 3 used Submit Answer -/1 Paver Manufacturing Company Budgeted Income Statement Contribution margin Fixed production costs Fixed selling and administrative expenses Taxes on Income Net Income/tloss) Sales Income before taxes Variable cost of sales e Textbook and Media $ List of Accounts Save for Later Attempts: 0 of 3 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above