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, 2049, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Regina Soap Co.: Cash $99,100 Accounts Receivable 194,200 Finished Goods 40,800 Work in Process 27,200 Materials 44,700 Prepaid Expenses 3,300 Plant and Equipment 492,500 Accumulated Depreciation-Plant and Equipment $211,800 Accounts Payable 132,600 Common Stock, $10 par 350,000 Retained Earnings 207,400 $901,800 $901,800 Factory output and sales for 2019 are expected to total 24,000 units of product, which are to be sold at $110 per unit. The quantities and costs of the inventories at December 31, 2019, 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 Variable (Total for (Per Unit Year) Sold) Cost of goods manufactured and sold: Direct materials $28 Direct labor 8.5 Factory overhead: Depreciation of plant and equipment Other factory overhead $24,000 7,400 5 Other factory overhead 7,400 5 Selling expenses: Sales salaries and commissions 86,200 14 Advertising 72,000 Miscellaneous selling expense 6,200 2 Administrative expenses: Office and officers salaries 56,600 7 Supplies 2,900 1 Miscellaneous administrative expense 1,500 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 $232,600 on 2049 taxable income will be paid during 2049. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $133,000 cash in May. Required: 1. Prepare a budgeted income statement for 2049. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2019 Sales $ 2,640,000 672,000 Cost of goods sold: Direct materials Direct labor Factory overhead 204,000 151,400 1,027,400 $ 1,612,600 Cost of goods sold Gross profit Operating expenses: Selling expenses: Sales salaries and commissions Advertising Miscellaneous selling expense 422,200 96,000 X 54,200 Miscellaneous selling expense 54,200 572,400 X Total selling expenses Administrative expenses: Office and officers salaries $ 224,600 26,900 Supplies Miscellaneous administrative expense 37,500 Total administrative expenses 289,000 Total operating expenses Income before income tax $ Income tax expense Net income 2. Prepare a budgeted balance sheet as of December 31, 2019. Regina Soap Co. Budgeted Balance Sheet December 31, 2019 Assets Current assets: Cash Accounts receivable Inventories: Finished goods Work in process Materials Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment Accumulated depreciation Total property, plant, and equipment Total assets Liabilities Current liabilities: Accounts payable Stockholders' Equity Common stock Retained earnings Total stockholders' equity