The following is Alpha Hotel's income statement for the year ended December 31, 2020. Alpha...
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The following is Alpha Hotel's income statement for the year ended December 31, 2020. Alpha Hotel Income Statement For the Year Ending December 31, 2020 Revenue $800,000 Expenses Administrative Expense Marketing Expense Variable Wages Expense Management Salaries Expense Rent Expense Utilities Expense Total Expenses Net Income 25,000 12,000 320,000 120,000 200,000 60,000 737,000 $63,000 Alpha Hotel is a limited-service hotel with 18 rooms and no food and beverage operations. Management does not intend to spend a lot of time and money on budgeting. The manager has determined the 2021 budgeted income statement should simply reflect the following predicted changes from the 2020 income statement: Revenues will increase by 2.5%. Marketing costs will decrease by 2%. Management salaries will increase by 4%. Variable wages will remain consistent as a percentage of revenue. Utilities will increase by 2%. Administrative costs and rent will remain the same. Prepare the budgeted income statement for the year ending December 31, 2021, using the incremental budgeting approach. Alpha Hotel Budgeted Income Statement For the Year Ending December 31, 2021
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