Pinnacle Engineering, an acclaimed chemical engineering team of engineers, chemists, and other scientists, had the following income in 2020: 

The following changes are expected in 2021: 

1. The company is expecting a 12 percent increase in revenues because of increasing demand in the marketplace for its services. 

2. Training costs are expected to increase by $50,000. 

3. Supplies are expected to increase to eight percent of revenue. 

4. Phone, fax, accounting services, and insurance amounts will stay the same. 

5. Depreciation expense will increase by $9,000 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 $36,000 per year. 

7. Utilities and miscellaneous expenses are expected to increase next year by 10 percent. 

8. Taxes on income will be 20 percent. 

Required 

Prepare a budgeted income statement for Pinnacle Engineering for fiscal year 2021.

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Revenue $ 3,550,000 Less operating expenses: Salaries $2,400,000 Accounting services Training Supplies 63,000 182,000 175,000 Phone and fax 3,850 Insurance 303,000 Depreciation 220,000 Utilities 35,000 Miscellaneous 7,100 Total operating expenses 3,388,950 Income before taxes 161,050 Less taxes on income 32,210 Net income $ 128,840