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, 2014, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.: Cash Accounts Receivable Finished Goods Work in Process Materials $116,200 204,500 Prepaid Expenses Plant and Equipment Accumulated Depreciation-Plant and Equipment Accounts Payable Common Stock, $10 par Retained Earnings 42,900 28,600 47,000 3,500 532,200 $228,800 174,000 300,000 $974,900 272,100 $974,900 Factory output and sales for 2014 are expected to total 26,000 units of product, which are to be sold at $100 per unit. The quantities and costs of the inventories at December 31, 2014, 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 Cost of goods manufactured and sold: Direct materials Direct labor (Total for Year) (Per Unit Sold) $25 8 Factory overhead: Depreciation of plant and equipment Other factory overhead $26,000 8,100 4.5 Selling expenses: Sales salaries and commissions 93,300 12.5 Advertising 78,000 Miscellaneous selling expense 6,800 2 Administrative expenses: Office and officers salaries 61,400 6.5 Supplies 3,100 151 Miscellaneous administrative expense 1,600 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 $220,700 on 2014 taxable income will be paid during 2014. 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 $144,000 cash in May. Required: 1. Prepare a budgeted income statement for 20Y4. 1. Prepare a budgeted income statement for 20Y4. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4 Cost of goods sold: Cost of goods sold Gross profit Operating expenses: Selling expenses: Total selling expenses Administrative expenses: 69 69 Administrative expenses: Total administrative expenses Total operating expenses Income before income tax 2. Prepare a budgeted balance sheet as of December 31, 2014. 2. Prepare a budgeted balance sheet as of December 31, 2014. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4 Assets Current assets: Inventories: Total current assets Property, plant, and equipment: Total assets +9 A Liabilities Current liabilities: Total stockholders' equity Total liabilities and stockholders' equity Liabilities Stockholders' Equity