Intro to Accounting and Finance Principles - Assignment 3
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International School of Management
Introduction to Accounting and Finance Principles (ISM-952)
Assignment 3
January 17th, 2012
Page 1 of 5
Question 1: Prepare a Budgeted Income Statement for the next 7 years (Starting with 2000). Answer 1: Using the information in the case, and the year 1999 as a base year, a 7-year budgeted income statement is shown below.
Base 1999 REVENUES Number of passengers per year Fair Total Revenues EXPENSES Cash Expenses Salaries Owner Salary Dispatcher Salaries (Fixed) Drivers Salaries (35% of Sales) Total Salaries Payroll Taxes (10% of Salaries) Other Employee Benefits (10% of Salaries) Gas, Oil, & Maintenance (7% of Sales) Insurance (Fixed) Rent & Utilities (Fixed) Advertising - Yellow pages (Fixed) Advertising - Newspaper & radio (3% of Sales) Miscellaneous (Fixed) Total Cash Expenses Non-cash Expenses Dipreciation Vehicle Dipreciation Phone Equipment Dipreciation Total Dipreciation Total Expenses Income Before Taxes Income Tax @ 20% NET INCOME Year 1 2000 Year 2 2001 Year 3 2002 Year 4 2003 Year 5 2004 Year 6 2005 Year 7 2006
$
16,000.00 16,000.00 16,640.00 17,305.60 17,997.82 18,717.74 19,466.45 20,245.10 25.00 $ 25.00 $ 26.00 $ 27.00 $ 28.00 $ 29.00 $ 30.00 $ 31.00 400,000.00 400,000.00 432,640.00 467,251.20 503,939.07 542,814.37 583,993.39 627,598.23
56,000.00 140,000.00 196,000.00 19,600.00 19,600.00 28,000.00 8,000.00 18,000.00 3,000.00 12,000.00 15,000.00 319,200.00
32,000.00 57,680.00 140,000.00 229,680.00 22,968.00 22,968.00 28,000.00 8,000.00 18,000.00 3,000.00 12,000.00 15,000.00 359,616.00
32,960.00 59,410.40 151,424.00 243,794.40 24,379.44 24,379.44 30,284.80 8,000.00 18,000.00 3,000.00 12,979.20 15,000.00 379,817.28
33,948.80 61,192.71 163,537.92 258,679.43 25,867.94 25,867.94 32,707.58 8,000.00 18,000.00 3,000.00 14,017.54 15,000.00 401,140.44
34,967.26 63,028.49 176,378.68 274,374.43 27,437.44 27,437.44 35,275.74 8,000.00 18,000.00 3,000.00 15,118.17 15,000.00 423,643.23
36,016.28...
Introduction to Accounting and Finance Principles (ISM-952)
Assignment 3
January 17th, 2012
Page 1 of 5
Question 1: Prepare a Budgeted Income Statement for the next 7 years (Starting with 2000). Answer 1: Using the information in the case, and the year 1999 as a base year, a 7-year budgeted income statement is shown below.
Base 1999 REVENUES Number of passengers per year Fair Total Revenues EXPENSES Cash Expenses Salaries Owner Salary Dispatcher Salaries (Fixed) Drivers Salaries (35% of Sales) Total Salaries Payroll Taxes (10% of Salaries) Other Employee Benefits (10% of Salaries) Gas, Oil, & Maintenance (7% of Sales) Insurance (Fixed) Rent & Utilities (Fixed) Advertising - Yellow pages (Fixed) Advertising - Newspaper & radio (3% of Sales) Miscellaneous (Fixed) Total Cash Expenses Non-cash Expenses Dipreciation Vehicle Dipreciation Phone Equipment Dipreciation Total Dipreciation Total Expenses Income Before Taxes Income Tax @ 20% NET INCOME Year 1 2000 Year 2 2001 Year 3 2002 Year 4 2003 Year 5 2004 Year 6 2005 Year 7 2006
$
16,000.00 16,000.00 16,640.00 17,305.60 17,997.82 18,717.74 19,466.45 20,245.10 25.00 $ 25.00 $ 26.00 $ 27.00 $ 28.00 $ 29.00 $ 30.00 $ 31.00 400,000.00 400,000.00 432,640.00 467,251.20 503,939.07 542,814.37 583,993.39 627,598.23
56,000.00 140,000.00 196,000.00 19,600.00 19,600.00 28,000.00 8,000.00 18,000.00 3,000.00 12,000.00 15,000.00 319,200.00
32,000.00 57,680.00 140,000.00 229,680.00 22,968.00 22,968.00 28,000.00 8,000.00 18,000.00 3,000.00 12,000.00 15,000.00 359,616.00
32,960.00 59,410.40 151,424.00 243,794.40 24,379.44 24,379.44 30,284.80 8,000.00 18,000.00 3,000.00 12,979.20 15,000.00 379,817.28
33,948.80 61,192.71 163,537.92 258,679.43 25,867.94 25,867.94 32,707.58 8,000.00 18,000.00 3,000.00 14,017.54 15,000.00 401,140.44
34,967.26 63,028.49 176,378.68 274,374.43 27,437.44 27,437.44 35,275.74 8,000.00 18,000.00 3,000.00 15,118.17 15,000.00 423,643.23
36,016.28...