Prue Williamson Marketing Services is preparing a budget for the quarter year ended 31 December 2017. The information available for the budget is as follows:

1. Prue’s hourly charge-out rate for the year ended 30 September 2017 was $160 but she intends to increase this by 5% for the budget period. Prue also employs Win Kee, a newly graduated marketing student, and charges his work out at $80 per hour and does not intend to increase this for the next year.

2. Prue estimates that the following hours will be billed to clients for the quarter:

Prue            500 hours

Win Kee      400 hours

3. The services are all provided on credit and are collected 60% in the same quarter and 40% in the following quarter.

4. The monthly expenses for the year ended 30 September 2017 are provided with Prue’s estimates of how they will change for the budget period:

	Year ended 30 Sept. 2017	Year ended 30 Sept. 2018
Depreciation Electricity Insurance Long-service leave provision Rent Salaries Stationery Telephone	$   400 500 2000 300 2000 15000 500 1000	No increase Increase of 10% Increase of 20% 2% of salaries Increase of 5% Increase of 5% No increase Increase of 3%

5. Insurance is paid annually in October. Rent is paid 1 month in advance and electricity and telephone expenses are paid in the month after they are incurred. All other expenses are paid in the month they occur.

6. Prue intends to buy new office furniture at the end of December for $5200.

7. The balance sheet as at 1 October 2017 has the following account balances:

Cash at bank Accounts receivable Prepaid rent Furniture and equipment

$ 52000 75600 2100 24000

Accumulated depreciation Electricity payable Telephone payable Provision for long-service leave Prue Williamson, Capital

$  14400 500 1000 7200 130600

Required

Prepare a budgeted income statement, a cash budget and a budgeted balance sheet for the quarter ending 31 December 2017.