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 Mesa Publishing Co.: Cash $ 26,000 Accounts Receivable 23,800 Finished Goods 16,900 Work in Process 4,200 Materials 6,400 Prepaid Expenses 600 Plant and Equipment 82,000 Accumulated DepreciationiPlant and Equipment $ 32,000 Accounts Payable 14,800 Common Stock, $1.50 par 30,000 Retained Earnings 83,100 $159,900 $159,900 Factoryr output and sales for 20Y9 are expected to total 3,800 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 20:9, 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 Estimated Costs and Expenses Fixed Variable (Total for Year) (Per Unit Sold) Cost of goods manufactured and sold: Direct materials _ $30.00 Direct labor 8.40 Factory overhead: Depreciation of plant and equipment .15 4,000 _ Other factory overhead 1,400 4.80 Selling expenses: Sales salaries and commissions 12,800 13.50 Advertising 13,200 _ Miscellaneous selling expense 1,000 2.50 Administrative expenses: Office and officers salaries 7,800 7.00 Supplies 500 1.20 Miscellaneous administrative expense 400 2.40 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 ax of $35,000 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $0.20 per share are expected to be declared and paid in March, June, eptember, and December on 20,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $22,000 cash in May. Rnnllird: Budgeted Income Statement For the Year Ending December 31, 2019 Sales 456,000 Cost of goods sold: Direct materials v 114,000 Direct labor v 31,920 Factory overhead v Cost of goods sold Gross profit Operating expenses: Selling expenses: Total selling expenses Administrative expenses: Office and officers salaries v Supplies v Miscellaneous administrative expense vFactory overhead v Cost of goods sold Gross profit Operating expenses: Selling expenses: Total selling expenses 000 0OO Administrative expenses: Office and officers salaries v Supplies Miscellaneous administrative expense v Total administrative expenses Total operating expenses Income before income tax