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, 2043, is prepared by the Accounting Department of Regina Soap Co.: Cash $106,200 Accounts Receivable 184,800 Finished Goods 38,800 Work in Process 25,900 Materials 42,500 Prepaid Expenses 3,100 Plant and Equipment 488,500 Accumulated Depreciation-Plant and Equipment $210,100 Accounts Payable 128,600 Common Stock, $10 par 350,000 Retained Earnings 201,100 $889,800 $889,800 Factory output and sales for 2014 are expected to total 24,000 units of product, which are to be sold at $120 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 goods manufactured and sold: Direct materials $30 Direct labor 9.5 5.5 15 72,000 Factory overhead: Depreciation of plant and equipment $24,000 Other factory overhead 7,400 Selling expenses: Sales salaries and commissions 86,200 Advertising Miscellaneous selling expense 6,200 2.5 Administrative expenses: Office and officers salaries 56,600 Supplies 2,900 Miscellaneous administrative expense 1,500 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 $261,400 on 204 taxable income will be paid during 2014. Regular quarterly cash dividends of $1 per share are expected to be declared and pald in March, June, September, and December on 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $132,000 cash in May. 7.5 1 2 Required: 1. Prepare a budgeted income statement for 2014. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2014 Cost of goods sold: E 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 2. Prepare a budgeted balance sheet as of December 31, 2014. Regina Soap Co. Budgeted Balance Sheet December 31, 2014 Assets Current assets: Inventories: Total current assets Property, plant, and equipment: Total assets Liabilities Current liabilities: Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity 3