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, 2018, is prepared by the Accounting Department of Regina Soap Co.: Cash Accounts Receivable Finished Goods $114,200 198,700 41,700 Work in Process Materials 27,800 45,700 Prepaid Expenses 3,400 Plant and Equipment 550,400 Accumulated Depreciation-Plant and Equipment $236,700 Accounts Payable 154,100 Common Stock, $10 par Retained Earnings 350,000 241,100 $981,900 $981,900 Factory output and sales for 20Y9 are expected to total 27,000 units of product, which are to be sold at $120 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 Variable (Total for Year) (Per Unit Sold) 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 $30 9.5 Factory overhead: Depreciation of plant and equipment $27,000 Other factory overhead 8,400 5.5 Selling expenses: Sales salaries and commissions 96,900 15 Advertising 81,000 Miscellaneous selling expense 7,000 2.5 Administrative expenses: Office and officers salaries Supplies Miscellaneous administrative expense 63,700 7.5 3,200 1,700 1 2 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 $294,000 on 20Y9 taxable income will be paid during 2019. 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 $149,000 cash in May. Required: Required: 1. Prepare a budgeted income statement for 20Y9. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9 Sales Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit 810,000 265,000 X 183,900 Operating expenses: Selling expenses: Sales salaries and commissions 405,000 X Advertising 81,000 Miscellaneous selling expense 74,500 Total selling expenses 560,500 X Administrative expenses: Office and officers salaries 266,200 Supplies 30,200 Miscellaneous administrative expense 55,700 3,240,000 1,249,900 X 1,990,100 X Administrative expenses: Office and officers salaries Supplies Miscellaneous administrative expense Total administrative expenses Total operating expenses Income before income tax Income tax expense Net income Feedback 266,200 30,200 55,700 352,100 2. Prepare a budgeted balance sheet as of December 31, 2019. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 Assets Current assets: Cash Accounts receivable Inventories: 912,600 X 1,077,500 X 294,000 783,500 X 2. Prepare a budgeted balance sheet as of December 31, 20Y9. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 Current assets: Cash Accounts receivable Inventories: Plant and equipment Total current assets Property, plant, and equipment: Plant and equipment Accumulated depreciation Total property, plant, and equipment Total assets Assets Liabilities 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 Total liabilities and stockholders' equity