As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y9, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Mesa Publishing Co.:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,000 .............

Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,800 .............

Finished Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,900 .............

Work in Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200 .............

Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,400 .............

Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 .............

Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,000 .............

Accumulated Depreciation-Plant and Equipment. . . . . . . . . . . . . . . . . . . . . . $ 32,000

Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,800

Common Stock, $1.50 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000

Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,100

.............................................................................. $159,900 .....$159,900

Factory output and sales for 20Y9 are expected to total 3,800 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 20Y9, are expected to remain unchanged from the balances at the beginning of the year.

Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:

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 $35,000 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $0.20 per share are expected to be declared and paid in March, June, September, and December on 20,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $22,000 cash in May.
Instructions
1. Prepare a budgeted income statement for 20Y9.
2. Prepare a budgeted balance sheet as of December 31, 20Y9, with supporting calculations.

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Estimated Costs and Expenses Variable Fixed Total for Year) (Per Unit Sold) Cost ot goods manutactured and sold: $30.00 8.40 Direct labor Factory overhead: 4,000 1,400 Other factory 4.80 13.50 2.50 Selling expenses: Sales salaries and commissions Advertising Miscellaneous selling expense 12,800 13,200 1,000 Administrative expenses: 7,800 500 400 7.00 1.20 240 Ottice and otticers salaries