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

Garret 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):

Additional information:
1. Sales and variable costs of sales are expected to increase by 7 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, 40 percent direct labor, and 20 percent variable overhead. Materials are purchased on credit. Sixty 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 production costs (other than $5,000 of depreciation expense) are expected to increase by 1.5 percent. Fixed production costs requiring payment are paid in the quarter they are incurred.
5. Fixed selling and administrative costs (other than $3,000 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.
Required
a. Prepare a budgeted income statement for the first quarter of 2018.
b. Prepare a budgeted statement of cash budget for the first quarter of 2018.
c. Prepare a budgeted balance sheet as of the end of the first quarter of 2018.

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Sales of bug spray Less variable cost of goods sold Contribution margin Less fixed production costs Less fixed selling and administrative expenses Income before taxes Less taxes on income Net income $500,000 220,000 $90,000 140,000 50,000 32,000 $ 48,000 Assets: Cash $ 30,000 Accounts receivable 250,000 Total current assets 280,000 Fixtures and equipment Less accumulated depreciation $130,000 80,000 50,000 Total assets $330,000 Liabilities and owners' equity: Accounts payable Retained earnings $ 44,800 175,000 Common stock 110,200 Total liabilities and owners' equity $330,000