Pinnacle Engineering, an acclaimed chemical engineering team of engineers, chemists, and other scientists, had the following income in 2011:

The following changes are expected in 2012:
1. The company is expecting a 10 percent increase in revenues because of increasing demand in the marketplace for its services.
2. Training costs are expected to increase by $30,000.
3. Supplies are expected to increase to 10 percent of revenue.
4. Phone, fax, and insurance amounts will stay the same.
5. Depreciation expense will increase by $15,000 per year, since the company is planning to purchase equipment for $75,000.
6. Pinnacle is planning to hire a laboratory technician at a salary of $75,000 per year.
7. Utilities and miscellaneous expenses are expected to increase next year by 15 percent.
8. Taxes on income will be 40 percent.

Required
Prepare a budgeted income statement for Pinnacle Engineering for fiscal year 2012.

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Revenue $3,850,000 Less operating expenses: Salaries expense Accounting services Training Supplies Phone and fax Insurance Depreciation Utilities Miscellaneous $2,400,000 63,000 182,000 225,000 3,850 303,000 220,000 35,000 7,100 3,438,950 411,050 164,420 246,630 Total operating expenses Income before taxes Less taxes on income Net income