Microsoft Corporation is preparing its budget for the next fiscal year. The following information is provided:
•Sales: $1,000,000
•Cost of Goods Sold: $600,000
•Operating Expenses: $250,000
•Interest Expense: $20,000
•Tax Rate: 25%
Required:
1.Prepare a budgeted income statement.
2.Calculate the expected net income.
3.Discuss the importance of budgeting and forecasting for strategic planning.