Shouldn't the operating expenses for 2020 be 8074.9? Forecasting an Income StatementADP reports the following income statement.AUTOMATIC DATA PROCESSING INC.Statement of Consolidated EarningsFor Year Ended June 30, 2019, $ millions Total revenues$14,175.2Operating expenses7,145.9Systems development and programming costs636.3Depreciation and amortization304.4Total cost of revenues8,086.6Selling, general, and administrative expenses3,064.2Interest expense129.9Total expenses11,280.7Other income expense, net111.1Earnings before income taxes3,005.6Provision for income taxes712.8Net earnings$ 2,292.8 Forecast ADP’s 2020 income statement assuming the following income statement relations. All percentages (other than total revenue growth and provision for income taxes) are based on historic percent of total revenues.Total revenues growth13%Depreciation and amortization$460.5 millionInterest expenseNo changeOther (income) expense, netNo changeIncome tax rate25% Round your answers to one decimal place. Do not use negative signs with your answers. AUTOMATIC DATA PROCESSING INC.Forecasted Income StatementFor Year Ended June 30, 2019, $ millionsJune 2019June 2020Total revenues$14,175.2Answer Operating expenses7,145.9Answer Systems development and programming costs636.3Answer Depreciation and amortization304.4Answer Total cost of revenues8,086.6Answer Selling, general, and administrative expenses3,064.2Answer Interest expense129.9Answer Total expenses11,280.7Answer Other income expense, net111.1Answer Earnings before income taxes3,005.6Answer Provision for income taxes712.8Answer Net earnings$ 2,292.8Answer

Operating expenses have a significant impact on a company's profitability and cash flow. Operating…

Answered: Forecasting an Income Statement ADP…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Shouldn't the operating expenses for 2020 be 8074.9?

Forecasting an Income Statement
ADP reports the following income statement.

AUTOMATIC DATA PROCESSING INC. Statement of Consolidated Earnings For Year Ended June 30, 2019, $ millions
Total revenues	$14,175.2
Operating expenses	7,145.9
Systems development and programming costs	636.3
Depreciation and amortization	304.4
Total cost of revenues	8,086.6
Selling, general, and administrative expenses	3,064.2
Interest expense	129.9
Total expenses	11,280.7
Other income expense, net	111.1
Earnings before income taxes	3,005.6
Provision for income taxes	712.8
Net earnings	$ 2,292.8

Forecast ADP’s 2020 income statement assuming the following income statement relations. All percentages (other than total revenue growth and provision for income taxes) are based on historic percent of total revenues.

Total revenues growth	13%
Depreciation and amortization	$460.5 million
Interest expense	No change
Other (income) expense, net	No change
Income tax rate	25%

Round your answers to one decimal place.

Do not use negative signs with your answers.

AUTOMATIC DATA PROCESSING INC. Forecasted Income Statement For Year Ended June 30, 2019, $ millions	June 2019	June 2020
Total revenues	$14,175.2	Answer
Operating expenses	7,145.9	Answer
Systems development and programming costs	636.3	Answer
Depreciation and amortization	304.4	Answer
Total cost of revenues	8,086.6	Answer
Selling, general, and administrative expenses	3,064.2	Answer
Interest expense	129.9	Answer
Total expenses	11,280.7	Answer
Other income expense, net	111.1	Answer
Earnings before income taxes	3,005.6	Answer
Provision for income taxes	712.8	Answer
Net earnings	$ 2,292.8	Answer

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