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	$115,300
Accounts Receivable	199,500
Finished Goods	41,900
Work in Process	27,900
Materials	45,900
Prepaid Expenses	3,400
Plant and Equipment	584,600
Accumulated DepreciationPlant and Equipment			$251,400
Accounts Payable			162,700
Common Stock, $10 par			350,000
Retained Earnings			254,400
	$1,018,500		$1,018,500

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 (Total for Year)		Variable (Per Unit Sold)
Cost of goods manufactured and sold:
Direct materials	_		$30
Direct labor	_		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	63,700		7.5
Supplies	3,200		1
Miscellaneous administrative expense	1,700		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 20Y9. 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 $158,000 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
Sales			$fill in the blank 37636aff3f7ffab_2
Cost of goods sold:
Direct materials		$fill in the blank 37636aff3f7ffab_4
Direct labor		fill in the blank 37636aff3f7ffab_6
Factory overhead		fill in the blank 37636aff3f7ffab_8
Cost of goods sold			fill in the blank 37636aff3f7ffab_9
Gross profit			$fill in the blank 37636aff3f7ffab_10
Operating expenses:
Selling expenses:
Sales salaries and commissions	$fill in the blank 37636aff3f7ffab_12
Advertising	fill in the blank 37636aff3f7ffab_14
Miscellaneous selling expense	fill in the blank 37636aff3f7ffab_16
Total selling expenses		$fill in the blank 37636aff3f7ffab_17
Administrative expenses:
Office and officers salaries	$fill in the blank 37636aff3f7ffab_19
Supplies	fill in the blank 37636aff3f7ffab_21
Miscellaneous administrative expense	fill in the blank 37636aff3f7ffab_23
Total administrative expenses		fill in the blank 37636aff3f7ffab_24
Total operating expenses			fill in the blank 37636aff3f7ffab_25
Income before income tax			$fill in the blank 37636aff3f7ffab_26
Income tax expense			fill in the blank 37636aff3f7ffab_28
Net income			$fill in the blank 37636aff3f7ffab_30

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Use information from the expected sales, cost of goods manufactured and sold, and selling and administrative expenses.

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

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9
Assets
Current assets:
Cash		$fill in the blank f7537b060fb502b_2
Accounts receivable		fill in the blank f7537b060fb502b_4
Inventories:
Finished goods	$fill in the blank f7537b060fb502b_6
Work in process	fill in the blank f7537b060fb502b_8
Materials	fill in the blank f7537b060fb502b_10	fill in the blank f7537b060fb502b_11
Prepaid expenses		fill in the blank f7537b060fb502b_13
Total current assets			$fill in the blank f7537b060fb502b_14
Property, plant, and equipment:
Plant and equipment		$fill in the blank f7537b060fb502b_16
Accumulated depreciation		fill in the blank f7537b060fb502b_18
Total property, plant, and equipment			fill in the blank f7537b060fb502b_19
Total assets			$fill in the blank f7537b060fb502b_20
Liabilities
Current liabilities:
Accounts payable			$fill in the blank f7537b060fb502b_22
Stockholders' Equity
Common stock		$fill in the blank f7537b060fb502b_24
Retained earnings		fill in the blank f7537b060fb502b_26
Total stockholders equity			fill in the blank f7537b060fb502b_27
Total liabilities and stockholders equity			$fill in the blank f7537b060fb502b_28