Tutorial:Starting your own business

Week 6

Day 29: Projected Salary Expense and Payroll Taxes Expense

Click On the Link below to see the payroll information for the Inside Slider Company.
Inside Slider Payroll

Examining the numbers show what the salary projections are for this company. A projected income statement must be submitted as part of the business plan proposal.
Job TitleYearly PayPay RateHours WorkedMonthly Pay
Owner/Truck Mgr$65,000$33.85160$5416.67
window person$20,000$10.41160$1,666.67
Kitchen Worker$18,400$9.35160$1,500

The total monthly salary expense is $11,783

The table below shows the payroll taxes for Inside Slider for this month. These taxes must be paid on a regular basis to the IRS and Franchise Tax Boards.

FICA/Social Security.062$730.57
Total Payroll Taxes.1185$1,396.33

Look at the projected income statement below to see the placement of these amounts relating to salary. They are underlined.

Inside Slider Food Truck and Catering Company
Income Statement
For the period ending Current Date
Sales 00.00
Catering Income00.00
Total Revenue00.00
Beginning Inventory
Total cost of merchandise available for sale
Less: Ending Inventory
Cost of Good Sold
Gross Profit
Salary Expense$11,783.00
Repairs Expense $1,000.00
Advertising Expense$100.00
Fuel Expense$500.00
Depreciation Expense$762.49
Insurance Expense$300.00
Miscellaneous Expense$100.00
Payroll Taxes Expense$1,396.33
Legal And Accounting00.00
Utilities Expense$100.00
Web Internet Expenses$20.00
Interest Expense$526.75
Propane Expense$100.00
Total Expenses$16,688.57
Net Profit

Day 29: Other Projected Expenses

We need to project other expenses at this time. How much propane will we use? gasoline for the generator? Insurance for the food truck, gas and oil and maintenance on the truck, equipment repairs? amount spent on advertising? You will need to do some research on these expenses. In some cases you will find that these expenses are listed as a percentage of sales. We do not know this amount yet, so you might have to come back and do this a little later. Some of these expenses are listed on the income statement form above.

Depreciation expense is a way of expensing out the cost of assets and goes toward reducing your taxable income. The truck costs 85,000. Depreciated over 10 years using a straight line method and divided by 12 equal amounts equals 708.33 per month. Furniture and fixtures are valued at $1,650 depreciated over 3 years = $550 per year or $45.83 per month. The office equipment depreciated in a straight line method over 3 years equals $8.33 per month. Therefore the total depreciation for our business is $762.49 per month