So your new accountant could practice the budgeting process in your for-profit company, you want her to compare budgeting methods for two different kinds of entities.
You give her information for a for-profit and for a nonprofit entity and ask her to complete the following:
Given the assumptions and data in this Excel file (attached):
complete next year's budgeted figures for each entity within the same Excel worksheet (yellow cells)
include your reasoning for most of the budgeted figures (green cells)
Because of a bad recession, government grants were not cut by 50% but are eliminated completely for next year's budget and fundraising efforts—despite an increase in expenses—did not improve at all.
Explain what you would recommend that the museum manager do.© BrainMass Inc. brainmass.com June 4, 2020, 4:05 am ad1c9bdddf
The two museums are dramatically different. The for profit museum is growing by 25% in revenues but most of the expenses are fixed so the increase in revenues is mostly adding to profit. The nonprofit museum, by contrast, has non-recurring revenue (grants) unrelated to its patronage that is expensive to replace. I would recommend that the nonprofit increase the ticket prices to provide more support from patrons and less from grants.
The for-profit museum is in the enviable position of having substantial growth in patronage ...
Your tutorial is 354 words and a spreadsheet. The two entities are contrasted and one is found in better shape than the other. Reasons are given for this conclusion.