Requirement 5 Draper Consulting is projecting service revenue for 2013 to be 50

Question

Requirement 5

Draper Consulting is projecting service revenue for 2013 to be 50 times higher than 2012. Of that, 20% is expected to be credit services and 80% are expected to be cash services. Expenses include rent expense of 7% of total services, utilities expense of 2% of total services, salary expense of 10% of total services, depreciation expense-equipment of $410, depreciation expense-furniture of $591, depreciation expense-building of $1,652, and supplies expense of 5% of total services.

Based on the above information, complete the Sales Budget, Operating Expense Budget and Budgeted Income Statement for Draper Consulting for the year ended December 31, 2013.

Round all calculations to the nearest dollar.

Draper Consulting Inc. Sales Budget 2013 Total Sales Draper Consulting Inc. Operating Expense Budget 2013 Total operating expense

Explanation / Answer

SInce the value of Services for 2012 is not provided assuming the value of services for 2012 is $100000 and hence for 2013 it is 50 times higher than 2012 The total services for 2013 is $150000

Credit Services=$150000*20%=$30000

Cash Services=$150000*80%=$120000

Sales Budget

Reaching of the budgeted net income goal can be decribed based on the information provided.

Notes

1.The Operating expenses are the expenses which are not directly involved in the production and is incurred for the purpose of administration and general purposes such as for office purposes

2.The Supplies and Utilities are treated as Office Expenses and hence treated as Operating Expenses

3.Depreciation is for the Furniture and Building as it is for the purpose of Office and treated in OPerating Expenses

Services of 2013 150000 Credit(20%) Cash(80%) 30000 120000

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