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, 2019, the following tentative trial balance as of December 31, 2018, is prepared by the Accounting Department of Regina Soap Co.: Cash Accounts Receivable $85,000 125,600 Finished Goods 69,300 Work in Process Materials 32,500 48,900 Prepaid Expenses 2,600 Plant and Equipment 325,000 Accumulated Depreciation-Plant and Equipment $156,200 Accounts Payable Common Stock, $10 par 62,000 180,000 Retained Earnings $688,900 290,700 $688,900 Factory output and sales for 20Y9 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, 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: Cost of goods manufactured and sold: Direct materials Direct labor Estimated Costs and Expenses Fixed Variable (Total for Year) (Per Unit Sold) $1.10 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 Supplies 72,400 0.12 5,000 4,000 0.10 0.05 Miscellaneous administrative expense 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 2019 taxable income will be paid during 2019. 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 20Y9. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9 Line Item Description Cost of goods sold: 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 Amount Amount Amount 2. Prepare a budgeted balance sheet as of December 31, 20Y9. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 Assets Current assets: Inventories: Total current assets Property, plant, and equipment: Total property, plant, and equipment Total assets Liabilities Current liabilities: Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity