Skip main navigation

The Budgeted Income Statement

Learn more about budgeted income statement.

The Budgeted Income Statement

With interest expenses gotten from the cash budget, Royal can prepare the budgeted income statement.

Image of the Royal Company Budget Income Statement for 3 months Ended June 30. Sales (100k Units @ $10) =$1M, Cost of goods sold (100k @ $4.99) = 499k, Gross margin = 501k, Selling and admin exp = 260k, Operation income = 241k, Interest exp 2k, Net income = 239k

The Budgeted Balance Sheet

Royal reported the following account balances prior to preparing its budgeted financial statements:

  • Land – $50,000
  • Ordinary shares – $200,000
  • Retained earnings – $146,150 (April 1)
  • Equipment – $175,000

Royal Company Budget Balance Sheet June 30. Assets: Cash 43k, Accounts receivable 75k, raw materials inventory 4.6k, finished goods inventory 24,950, land 50k, equipment 367k, total assets 564,550. Liabilities and stockholders' equity: Accounts payable 28.4k, ordinary shares 200k, retained earnings 336,150, Total liabilities and stockholders' equity 564,550

Budgeting in an International Environment


  • Translating foreign currency
  • Predicting inflation rates and prices in unstable economies
  • Predicting sales in countries with different consumer preferences
  • Dealing with different labour laws, social customs, and norms affecting wage rates and worker productivity

This article is from the free online

Accounting for Today’s Dynamic World

Created by
FutureLearn - Learning For Life

Reach your personal and professional goals

Unlock access to hundreds of expert online courses and degrees from top universities and educators to gain accredited qualifications and professional CV-building certificates.

Join over 18 million learners to launch, switch or build upon your career, all at your own pace, across a wide range of topic areas.

Start Learning now