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, 20Y8, is prepared by the Accounting Department of Regina Soap Co.:

Cash	$116,800
Accounts Receivable	202,100
Finished Goods	42,400
Work in Process	28,300
Materials	46,500
Prepaid Expenses	3,400
Plant and Equipment	551,300
Accumulated DepreciationPlant and Equipment			$237,100
Accounts Payable			196,400
Common Stock, $10 par			250,000
Retained Earnings			307,300
	$990,800		$990,800

Factory output and sales for 20Y9 are expected to total 27,000 units of product, which are to be sold at $90 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 (Total for Year)		Variable (Per Unit Sold)
Cost of goods manufactured and sold:
Direct materials	_		$23
Direct labor	_		7
Factory overhead:
Depreciation of plant and equipment	$27,000		_
Other factory overhead	8,400		4
Selling expenses:
Sales salaries and commissions	96,900		11.5
Advertising	81,000		_
Miscellaneous selling expense	7,000		2
Administrative expenses:
Office and officers salaries	63,700		5.5
Supplies	3,200		1
Miscellaneous administrative expense	1,700		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 $192,800 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $149,000 cash in May.

Required:

Question Content Area

1. Prepare a budgeted income statement for 20Y9.

2. Prepare a budgeted balance sheet as of December 31, 20Y9.

Required: 2. Prepare a budgeted balance sheet as of Docember 31,20 D