As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.:

Cash	$118,700
Accounts Receivable	217,200
Finished Goods	45,600
Work in Process	30,400
Materials	50,000
Prepaid Expenses	3,700
Plant and Equipment	568,600
Accumulated DepreciationPlant and Equipment			$244,500
Accounts Payable			210,500
Common Stock, $10 par			250,000
Retained Earnings			329,200
	$1,034,200		$1,034,200

Factory output and sales for 20Y4 are expected to total 28,000 units of product, which are to be sold at $100 per unit. The quantities and costs of the inventories at December 31, 20Y4, 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:

	Estimated Costs and Expenses
	Fixed (Total for Year)		Variable (Per Unit Sold)
Cost of goods manufactured and sold:
Direct materials	_		$25
Direct labor	_		8
Factory overhead:
Depreciation of plant and equipment	$28,000		_
Other factory overhead	8,700		4.5
Selling expenses:
Sales salaries and commissions	100,500		12.5
Advertising	84,000		_
Miscellaneous selling expense	7,300		2
Administrative expenses:
Office and officers salaries	66,100		6.5
Supplies	3,400		1
Miscellaneous administrative expense	1,800		1.5

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 $237,700 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $154,000 cash in May.

Required: 1. Prepare a budgeted income statement for 20Y4. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2014 Gross profit X Cost of goods sold: Cost of goods sold Gross profit Operating expenses: Selling expenses: Total selling expenses Administrative expenses: Total administrative expenses Total erating expenses Income before income tax 2. Prepare a budgeted balance sheet as of December 31, 2014. Regina Soap Co. Budgeted Balance Sheet December 31, 2014 Assets Current assets: Inventories: Total current assets II U Property, plant, and equipment: Total assets Liabilities Current liabilities: Stockholders' Equity Total stockholders' equity 9 Total liabilities and stockholders' equity