Reference no: EM131755277

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:

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:

1. Net receipts are estimated at €6,400,000.
2. Travel costs are expected to be 11 percent of net receipts.
3. Auctioneer services will be billed at 15 percent of net receipts.
4. Printing costs are expected to be €190,000.
5. Home office costs are budgeted for €30,000.
6. Shipping costs are expected to be 20 percent higher than the €105,000 budgeted in the last year.
7. Miscellaneous expenses for the coming year will be budgeted at €8,000.
8. Prepare the company's budgeted income statement for the coming year using a 40 percent income tax rate. Enter all amounts as positive numbers