Budget Income Statement: . Budgeted Income Statement (LO 2) Revenue Less operati

Question

Budget Income Statement:

. Budgeted Income Statement (LO 2) Revenue Less operating expenses: $3,850,000 Salaries expense Accounting services $2,400,000 Training 63,000 Supplies 182,000 Phone and fax 225,000 Insurance 3,850 Depreciation 303,000 Utilities 220,000 Miscellaneous 35,000 Total operating expenses 7,100 Income before taxes 3,438,950 Less taxes on income 411,050 Net income 164,420 The following changes are expected in 2012: $ 246,630 1. The company is expecting a 10 percent increase in revenues because of increasing demand in the marketplace for its services. 2. Training costs are expected to increase by $30,000. 3. Supplies are expected to increase to 10 percent of revenue. 4. Phone, fax, and insurance amounts will stay the same. 5. Depreciation expense will increase by $15,000 per year, since the company is planning to purchase equipment for $75,000. 6. THE Cou-PASY Uhire a laboratory technician at a salary of $75,000 per year. 7. Utilities and miscellaneous expenses are expected to increase next year by 15 percent. 8. Taxes on income will be 40 percent. Required Prepare a budgeted income statement

Explanation / Answer

Existing Budget Particulars Amount Amount Working Amount Amount Revenues and other items Sales revenue, net of discounts and allowances          3,850,000 3850000*1.1      4,235,000 Interest revenue Total revenues and other items          3,850,000      4,235,000 Expenses and other items Cost of goods sold Salaries          2,400,000 2400000+75000      2,475,000 Accounting services                63,000            63,000 Training              182,000 182000+30000          212,000 Supplies              225,000 4235000*0.1          423,500 Phone and fax                  3,850               3,850 Insurance              303,000          303,000 Depreciation expense              220,000 220000+15000          235,000 Utilities                35,000 35000*1.15            40,250 Miscllaneous                  7,100 7100*1.15               8,165 Total expenses and other items          3,438,950      3,763,765 Income before taxes              411,050          471,235 Less Taxes on income 40%              164,420          188,494 Net income              246,630          282,741

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.