Reference no: EM133124229

Ridge and Robertsare partners in a smallaccounting firm. Incomeand expenses for the year ended30 June 2020 were:

Fees Income	$ 224,000	Marketing Expenses	$ 6,900
Other Income	52,000	Other Expenses	2,000
Office Wages	31,000	Insurance	8,800
Office Expenses	9,600	Rent	11,200

Based on the data for the past three years, it shows that:

• Fees income has risen by 9% per annum.
• Other income has risen by 3% per annum
• Office expenses, Office wages, and Other Expenses have risen by 2% per annum.
• Insurance has risen by 6% per annum.
• Rent has risen by 3% per annum.
• Marketing expenses have risen by 7% per annum.

The purchase department advises that the firm is planning to upgrade the office fixtures and fittings, which will cost approximately $40,000.

Managers in Ridge and Roberts will receive a performance bonus at the end of the year if the firm achieves their budgeted profit. 

Required: 

(a)  Prepare the Income Statement for year ended 30 June 2020 and prepare a budgeted Income Statement for the year ending 30 June 2021 based on the above information

For the budgeted income statement, you will need to establish the assumptions such as increase or decrease % and parameters which will be relevant for the budget. You can use the parameters provided in the income statement for 2020 and add any additional parameters if necessary.