1. Budgeted Income Statement and Balance Sheet

   As a preliminary to requesting An accounting device used to plan and control resources of operational departments and divisions.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	$ 85,000
   Accounts Receivable	125,600
   Finished Goods	69,300
   Work in Process	32,500
   Materials	48,900
   Prepaid Expenses	2,600
   Plant and Equipment	325,000
   Accumulated DepreciationPlant and Equipment			$156,200
   Accounts Payable			62,000
   Common Stock, $10 par			180,000
   Retained Earnings			290,700
   	$688,900		$688,900

   Factory output and sales for 20Y4 are expected to total 200,000 units of product, which are to be sold at $5.00 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	_		$1.10
   Direct labor	_		0.65
   Factory overhead:
   Depreciation of plant and equipment	$40,000		_
   Other factory overhead	12,000		0.40
   Selling expenses:
   Sales salaries and commissions	46,000		0.45
   Advertising	64,000		_
   Miscellaneous selling expense	6,000		0.25
   Administrative expenses:
   Office and officers salaries	72,400		0.12
   Supplies	5,000		0.10
   Miscellaneous administrative expense	4,000		0.05

   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 $30,000 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $0.15 per share are expected to be declared and paid in March, June, September, and December on 18,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $75,000 cash in May.

   Required:

   1. Prepare a budgeted income statement for 20Y4.

   Regina Soap Co.
   Budgeted Income Statement
   For the Year Ending December 31, 20Y4
   Gross profit Income before income tax Interest expense Interest revenue Sales			$
   Cost of goods sold:
   Direct materials Income tax expense Miscellaneous selling expense Office and officers salaries Supplies		$
   Direct labor Gross profit Income tax expense Miscellaneous administrative expense Sales
   Advertising Factory overhead Income tax expense Sales salaries and commissions Sales
   Cost of goods sold
   Gross profit			$
   Operating expenses:
   Selling expenses:
   Income tax expense Net loss Sales salaries and commissions Sales Supplies	$
   Advertising Direct labor Direct materials Factory overhead Net loss
   Gross profit Income tax expense Miscellaneous selling expense Sales Supplies
   Total selling expenses		$
   Administrative expenses:
   Advertising Income tax expense Office and officers salaries Sales salaries and commissions Sales	$
   Advertising Direct materials Factory overhead Net loss Supplies
   Gross profit Income tax expense Miscellaneous administrative expense Miscellaneous selling expense Sales
   Total administrative expenses
   Total operating expenses
   Income before income tax			$
   Advertising Direct materials Factory overhead Income tax expense Supplies
   Gross profit Net income Net loss			$

   Feedback

   2. Prepare a budgeted balance sheet as of December 31, 20Y4.

   Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4
   Assets
   Current assets:
   Accounts payable Cash Common stock Materials Plant and equipment
   Accounts payable Accounts receivable Plant and equipment Retained earnings Work in process
   Inventories:
   Accumulated depreciation Cash Common stock Finished goods Plant and equipment
   Accounts payable Cash Plant and equipment Prepaid expenses Work in process
   Accounts payable Cash Common stock Materials Plant and equipment
   Accounts payable Plant and equipment Prepaid expenses Retained earnings Work in process
   Total current assets
   Property, plant, and equipment:
   Accounts receivable Cash Common stock Materials Plant and equipment
   Less accounts payable Less accumulated depreciation Less prepaid expenses Less retained earnings Less work in process
   Total assets			$
   Liabilities
   Current liabilities:
   Accounts payable Cash Common stock Materials Plant and equipment
   Stockholders' Equity
   Accounts payable Accumulated depreciation Common stock Plant and equipment Prepaid expenses
   Accumulated depreciation Cash Plant and equipment Prepaid expenses Retained earnings
   Total stockholders equity
   Total liabilities and stockholders equity			$