As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2009, the following tentative trial balance as of December 31, 2008, is prepared by the Accounting Department of Cornerstone Publishing Co.:

As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2009, the following tentative trial balance as of December 31, 2008, is prepared by the Accounting Department of Cornerstone Publishing Co.:

Balances of accounts receivable, prepaid expenses, and accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of $350,000 on 2009 taxable income will be paid during 2009. Regular quarterly cash dividends of $1.75 a share are expected to be declared and paid in March, June, September, and December. It is anticipated that fixed assets will be purchased for $180,000 cash in May.

Instructions
1. Prepare a budgeted income statement for 2009.
2. Prepare a budgeted balance sheet as of December 31, 2009, with supportingcalculations.

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Cash Accounts Receivable Finished Goods Work in Process Materials Prepaid Expenses. 5 122,500 246,700 157,800 37,800 57,800 4,500 620,000 Accumulated Depreciation-Plant and Equipment Accounts Payable Common Stock, $15 par.. . Retained Earnings 267,000 184,500 450,000 345,600 $1,247,100 1,247,100 Estimated Costs and Expenses Fixed (Total for Year) Variable (Per Unit Sold) Cost of goods manufactured and sold $26.00 8.50 Factory overhead Depreciation of plant and equipment 40,000 12,000 5.00 14.00 2.15 Selling expenses: Sales salaries and commissions 118,000 114,200 10,500 Administrative expenses: 83,600 4,400 2,000 6.50 1.25 1.45 Miscellaneous administrative expense