Question

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5. How planning budgeting differ from zero-based budgeting? 6. What are the strengths and weaknesses of program planning budgeting 7. What are the strengths and weaknesses of zero-based budgeting? 8. How does modified zero-based budgeting differ from zero-based budgeting? 9. What are the advantages and disadvantages of modified zero-based budgeting? (10. In team sport (professional or college), which form of budgeting should be used? PRACTICE problems 1. The Columbia Arena Company formed in 2015 and uses the accrual basis of accounting. Using the company's 2015 budget, provided in Exhibit 6.10, develop a pro forma operating budget for 2016 based on the following rev- enue and expense estimates:

Practice Problems 1. The Columbia Arena Company Formed in 2015 and uses the accrual basis of accounting. Using the company's 2015 budget, provided in Exhibit 6.10, develop a pro forma operating budget for 2016 based on the following revenue and expense estimates.

Answer A and B

Practice Problem 2 After you have calculated the 2016 budget, suppose your boss asks you to revise it so that overall revenues increase by 4% and operating expense decrease by 1.5%

Answer A and B

Answer 1

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Amount $ (Revised) 7,946,959 1,638,134 130,372 1,768,505 6,178,454 Revised Income Statement for 2016: Particulars Amount $ (old) Total Revenues 7,641,307 Less COGS: Concessions COGS 1,575.129 Merchandise COGS 125,358 Total COGS 1,700,486 Gross Profit 5,940,821 Operating Expenses: Personnel 1,005,525 G&A 223,450 Non-reimbursed Event Costs 167,588 Utilities 529,740 Insurance 272,500 Maintenance 379,045 Contract Services 119,900 Marketing and Promotion 218,000 Management Fee 109,000 Reserve 163,500 Total Operating Expenses 3,188,248 Operating Income (Loss) 2,752,573 994,967 221,104 165,828 524,178 269,639 375,065 118,641 215,711 107,856 161,783 3,154,771 3,023,683 Revenue increased by (7946959-7641307) = $ 305,652 Operating expenses decreased by (3154771-3188248) = $ 33,477