Budgeted Income Statement
Plenair, Inc., is located in France and organizes and coordinates art shows and auctions throughout the world. Its budgeted and actual costs for last year follow:
| Budgeted Cost |
Actual Cost |
| Total operating expenses |
€3,140,000 |
€3,176,868 |
| Net receipts |
6,200,000 |
6,369,200 |
Because the company sells only services, there is no cost of goods sold (net receipts equal gross margin). Plenair has budgeted the following fixed costs for the coming year: salaries, €1,000,000; advertising expense, €190,000; insurance, €150,000; and space rental costs, €300,000. Additional information pertaining to the operations of Plenair, Inc. in the coming years is as follows:
- Net receipts are estimated at €6,400,000.
- Travel costs are expected to be 11 percent of net receipts.
- Auctioneer services will be billed at 15 percent of net receipts.
- Printing costs are expected to be €190,000.
- Home office costs are budgeted for €30,000.
- Shipping costs are expected to be 20 percent higher than the €105,000 budgeted in the last year.
- Miscellaneous expenses for the coming year will be budgeted at €8,000.
- Prepare the company's budgeted income statement for the coming year using a 40 percent income tax rate. Enter all amounts as positive numbers