Final answer:
A budgeted income statement is prepared by estimating revenues and subtracting projected expenses. If revenues exceed expenses, the result is a budget surplus; if expenses are higher, there's a budget deficit. Taxes are ignored in this scenario.
Step-by-step explanation:
To prepare a budgeted income statement for the current year ending December 31 without considering income taxes, we start by estimating the expected revenues, which could be based on taxes or other forms of income, depending on the nature of the organization. Then we subtract all projected expenses, also known as spending, to find the operating profit or loss. Since taxes are ignored, the operating profit or loss will also be the net profit or loss.
To achieve an accurate budgeted income statement, careful forecasting and analysis are required for both the revenue and expense sides. The difference between the estimated total revenues and total expenses will give us either a budget surplus if revenues are higher, or a budget deficit if expenses exceed revenues.
It's important to note that the fiscal year mentioned is different from the one ending December 31. As such, revenue and expenses need to be adjusted to fit the correct time frame for this particular budgeted income statement.