Budgeted Income Statement and Balance Sheet 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 Accounts Receivable Finished Goods Work in Process Materials Prepaid Expenses Plant and Equipment Accumulated Depreciation-Plant and Equipment Accounts Payable Common Stock, $10 par Retained Earnings $103,100 200,000 42,000 28,000 46,000 3,400 514,500 $221,200 181,700 250,000 284,100 $937,000 $937,000 Factory output and sales for 20Y9 are expected to total 25,000 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: Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows: Estimated Costs and Expenses Fixed Variable (Total for Year (Per Unit Sold) Cost of goods manufactured and sold: Direct materials Direct labor Factory overhead $25 Depreciation of plant and equipment $25,000 Other factory overhead 7,800 Selling expenses: Sales salaries and commissions Advertising Miscellaneous selling expense 89,800 75,000 6,500 12.5 Administrative expenses Office and officers salaries Supplies Miscellaneous administrative expense 59,000 3,000 1,600 6.5 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 $212,200 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 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $139,000 cash in May Required 1. Prepare a budgeted income statement for 20Y9 Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9 Sales 2,750,000 | X Cost of goods sold Direct materials Direct labor Factory overhead 625,000V 200,000 145,300 V Cost of goods sold 970,300 1,779,700| X Gross proft Operating expenses Selling expenses Sales salaries and commissions Advertising Miscellaneous selling expense V/ 402,300V 75,000 6,500 533,800 Total selling expenses Administrative expenses: Office and officers salaries Supplies V Miscellaneous administrative expense39,100 Total administrative expenses 221,500 28,000 288,600V Total operating expenses Income before income tax Income tax expense Net income Regina Soap Co Budgeted Balance Sheet December 31, 20Y9 Assets Current assets: Cash 103,100 X Accounts receivable 200,000V Inventories: Finished goods Work in process V Materials Prepaid expenses Total current assets 42,000 28,000 46,000116,000 V 3,400 V Property, plant, and equipment: Plant and equipment 514,500 X Accumulated depreciation Total property, plant, and equipment Total assets Liabilities Current liabilities: Accounts payable 181,700 Stockholders' Equity Common stock 250,000 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity