1. 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 Regina Soap Co.:

   Cash	$99,900
   Accounts Receivable	173,800
   Finished Goods	36,500
   Work in Process	24,300
   Materials	40,000
   Prepaid Expenses	3,000
   Plant and Equipment	460,500
   Accumulated DepreciationPlant and Equipment			$198,000
   Accounts Payable			132,600
   Common Stock, $10 par			300,000
   Retained Earnings			207,400
   	$838,000		$838,000

   Factory output and sales for 20Y9 are expected to total 23,000 units of product, which are to be sold at $100 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:

   	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	$23,000		_
   Other factory overhead	7,100		4.5
   Selling expenses:
   Sales salaries and commissions	82,600		12.5
   Advertising	69,000		_
   Miscellaneous selling expense	6,000		2
   Administrative expenses:
   Office and officers salaries	54,300		6.5
   Supplies	2,800		1
   Miscellaneous administrative expense	1,400		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 $195,200 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 30,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $124,000 cash in May.

   Required:

   Question Content Area

   1. Prepare a budgeted income statement for 20Y9.

   Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9

   Gross profitIncome before income taxInterest expenseInterest revenueSales			$- Select -
   Cost of goods sold:
   Direct materialsIncome tax expenseMiscellaneous selling expenseOffice and officers salariesSupplies		$- Select -
   Direct laborGross profitIncome tax expenseMiscellaneous administrative expenseSales		- Select -
   AdvertisingFactory overheadIncome tax expenseSales salaries and commissionsSales		- Select -
   Cost of goods sold			fill in the blank 41b83e0ccf8f048_9
   Gross profit			$fill in the blank 41b83e0ccf8f048_10
   Operating expenses:
   Selling expenses:
   Income tax expenseNet lossSales salaries and commissionsSalesSupplies	$- Select -
   AdvertisingDirect laborDirect materialsFactory overheadNet loss	- Select -
   Gross profitIncome tax expenseMiscellaneous selling expenseSalesSupplies	- Select -
   Total selling expenses		$fill in the blank 41b83e0ccf8f048_17
   Administrative expenses:
   AdvertisingIncome tax expenseOffice and officers salariesSales salaries and commissionsSales	$- Select -
   AdvertisingDirect materialsFactory overheadNet lossSupplies	- Select -
   Gross profitIncome tax expenseMiscellaneous administrative expenseMiscellaneous selling expenseSales	- Select -
   Total administrative expenses		fill in the blank 41b83e0ccf8f048_24
   Total operating expenses			fill in the blank 41b83e0ccf8f048_25
   Income before income tax			$fill in the blank 41b83e0ccf8f048_26
   AdvertisingDirect materialsFactory overheadIncome tax expenseSupplies			- Select -
   Gross profitNet incomeNet loss			$- Select -

   Question Content Area

   2. Prepare a budgeted balance sheet as of December 31, 20Y9.

   Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9
   Assets
   Current assets:
   Accounts payableCashCommon stockMaterialsPlant and equipment		$fill in the blank af7d15fc0fabfd4_2
   Accounts payableAccounts receivablePlant and equipmentRetained earningsWork in process		fill in the blank af7d15fc0fabfd4_4
   Inventories:
   Accumulated depreciationCashCommon stockFinished goodsPlant and equipment	$fill in the blank af7d15fc0fabfd4_6
   Accounts payableCashPlant and equipmentPrepaid expensesWork in process	fill in the blank af7d15fc0fabfd4_8
   Accounts payableCashCommon stockMaterialsPlant and equipment	fill in the blank af7d15fc0fabfd4_10	fill in the blank af7d15fc0fabfd4_11
   Accounts payablePlant and equipmentPrepaid expensesRetained earningsWork in process		fill in the blank af7d15fc0fabfd4_13
   Total current assets			$fill in the blank af7d15fc0fabfd4_14
   Property, plant, and equipment:
   Accounts receivableCashCommon stockMaterialsPlant and equipment		$fill in the blank af7d15fc0fabfd4_16
   Accounts payableAccumulated depreciationPrepaid expensesRetained earningsWork in process		fill in the blank af7d15fc0fabfd4_18
   Total property, plant, and equipment			fill in the blank af7d15fc0fabfd4_19
   Total assets			$fill in the blank af7d15fc0fabfd4_20
   Liabilities
   Current liabilities:
   Accounts payableCashCommon stockMaterialsPlant and equipment			$fill in the blank af7d15fc0fabfd4_22
   Stockholders' Equity
   Accounts payableAccumulated depreciationCommon stockPlant and equipmentPrepaid expenses		$fill in the blank af7d15fc0fabfd4_24
   Accumulated depreciationCashPlant and equipmentPrepaid expensesRetained earnings		fill in the blank af7d15fc0fabfd4_26
   Total stockholders equity			fill in the blank af7d15fc0fabfd4_27
   Total liabilities and stockholders equity			$fill in the blank af7d15fc0fabfd4_28

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