Click here to access the Income Statement Spreadsheet. Based on the information in the spreadsheet and the assumptions listed below, prepare a Budgeted Income Statement for the year ending December 31, 2013. The following are the assumptions that should be used to prepare this statement: The VP of Sales has predicted a 0.5% increase in sales (total operating revenues) for the coming year The VP of Purchasing has predicted a 3.75% increase in raw materials for the coming year. All other inputs in the Cost of Goods Sold will remain the same as they were in 2012. (Raw materials represented 40% of the total Cost of Goods Sold in 2012) Depreciation expense is expected to decrease by 10% in the next year The CFO has stated that no fixed assets (Other Income) will be sold in 2013 Deferred taxes for 2013 are expected to decrease by 15% from the amount paid in 2012 Dividends paid to holders of common stock will be reduced by 10% in 2013 from the amount paid in 2012 Based on your Budgeted Income Statement for the year ending December 31, 2013, answer the following questions: Does the budgeted income statement indicate any changes in Gross Profits for 2013. If so, how much change (+/-), and why? Does the budgeted income statement indicate any changes in Net Operating Income for 2013? If so, how much change (+/-), and why? Does the budgeted income statement indicate any changes in Net Income (Earnings after Taxes, EAT) for 2013? If so, how much change (+/-), and why? What are the Earnings per Share in the 2013 budgeted income statement? How much did they change (+/-) from 2012, and why? What are the Retained Earnings in the 2013 budgeted income statement? How much did they change (+/-) from 2012, and why? Name at least three external factors that should be considered when preparing a budgeting or forecasting document. Explain why their consideration is important. Compose your 2013 Budgeted Income Statement Spreadsheet in Excel (or similar application) document. Compose your answers to the Budgeted Income Statement questions in an MS Word (or similar application) document. Ensure you address all parts of the topic and cite sources appropriately. Your answer should be at least 300 words in length and utilize the skills you have learned regarding problem solving. The question portion of this assignment should be written in APA format.
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