The American Red Cross is preparing its budget for the upcoming year. The following information is provided:
•Expected donations: $1,000,000
•Program expenses: $600,000
•Administrative expenses: $200,000
•Fundraising expenses: $100,000
Required:
1.Prepare a budgeted income statement.
2.Discuss the unique budgeting challenges faced by non-profit organizations.
3.Explain how effective budgeting can support the mission of the American Red Cross.