Reference no: EM133006228
Problem - Just Soft Limited is a software consulting company. Below is list of income and expenses for the company for the year ended December 2020.
$
Income Consulting fees 1,050,000
Expenses
Accounting fees 6,000
Advertising 20,000
Bank charges 2,500
Depreciation 12,000
FNU levy 1,300
General expense 15,500
Income tax expense 130,000
Interest on loan expense 20,000
Internet 15,000
Rent 20,000
Superannuation 13,000
Telephone expense 12,500
Utilities 11,000
Wages & salaries 130,000
Expectations for the following year are as follows:
Consulting fees to rise by 6%
Accounting expenses are expected to increase by 12.5%
Rent will increase by 15%
Wages & salaries and related expenses will increase by 7.5%
Advertising to be 5% of sales
Depreciation will increase due to projected capital additions of $100,000 which will be deprecated at 15% pa (rate didn't change)
Interest on loan is calculated on the principal amount drawn. The loan is expected to be paid off by June 2021.
Income tax expense will be 20% of the profit before tax
All other expenses are expected to same for 2021
Required - Prepare the income statement budget for 2021. Layout/Format of the income statement should be such that the following sub-totals/totals are shown: PBT, PAT.