Budgeted selling and administrative expenses for Scottsdale Styles Inc. in P for the year ended December 31, 2016, were as follows:
Advertising expense................................... $429,000
Office rent expense.................................... 105,000
Office salaries expense............................... 281,000
Office supplies expense.............................. 25,500
Officers’ salaries expense........................... 166,000
Sales salaries expense................................. 688,000
Telephone and fax expense........................ 13,500
Travel expense............................................ 244,000
Required:
1. Prepare a selling and administrative expenses budget, in good form, for the year 2016.
2. Using the information above and the budgets prepared in P, prepare a budgeted income statement for the year 2016, assuming an income tax rate of 30%.