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 1 $107,000 194,700 Finished Goods 40,900 Work in Process 27,300 Materials 44,800 Prepaid Expenses - 3,300 Plant and Equipment 548,900 Accumulated Depreciation-Plant and Equipment $236,000 Accounts Payable 148,600 Common Stock, $10 par 350,000 Retained Earnings 232,300 $966,900 $966,900 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: Estimated Costs and Expenses Fixed Variable (Total for Year) (Per Unit Sold) Cost of gone manifestir Cost of goods manufactured and sold: Direct materials Direct labor Factory overhead: Depreciation of plant and equipment Estimated Costs and Expenses Fixed Variable (Total for Year) (Per Unit Sold) $25 8 $26,000 8,100 4.5 Other factory overhead 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 Supplies Miscellaneous administrative expense 61,400 3,100 1,600 6.5 1 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 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $148,000 cash in May. Required: 1. Prepare a budgeted income statement for 2014. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2014: Sales Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4 Cost of goods sold: Gross profit Sales salaries and commissions Cost of goods sold Gross profit Operating expenses: Selling expenses: Total selling expenses Administrative expenses: Total administrative expenses Total operating expenses Income before income tax 0000 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 Liabilities Current liabilities: Accounts payable Stockholders' Equity Common stock < Current assets: Inventories: Total current assets Property, plant, and equipment: Total assets Current liabilities: Accounts payable Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 000 Liabilities Stockholders' Equity