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, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.:

Cash	$111,900
Accounts Receivable	204,800
Finished Goods	43,000
Work in Process	28,700
Materials	47,100
Prepaid Expenses	3,500
Plant and Equipment	501,300
Accumulated DepreciationPlant and Equipment			$215,600
Accounts Payable			185,100
Common Stock, $10 par			250,000
Retained Earnings			289,600
	$940,300		$940,300

Factory output and sales for 20Y4 are expected to total 25,000 units of product, which are to be sold at $90 per unit. The quantities and costs of the inventories at December 31, 20Y4, 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	$25,000		_
Other factory overhead	7,800		4
Selling expenses:
Sales salaries and commissions	89,800		11.5
Advertising	75,000		_
Miscellaneous selling expense	6,500		2
Administrative expenses:
Office and officers salaries	59,000		5.5
Supplies	3,000		1
Miscellaneous administrative expense	1,600		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 $178,400 on 20Y4 taxable income will be paid during 20Y4. 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 $135,000 cash in May.

Required:

1. Prepare a budgeted income statement for 20Y4.

Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4

Gross profitIncome before income taxInterest expenseInterest revenueSales			$- Select -
Cost of goods sold:
Direct materialsIncome tax expenseMiscellaneous selling expenseOffice and officers salariesSupplies		$- Select -
Direct laborGross profitIncome tax expenseMiscellaneous administrative expenseSales		- Select -
AdvertisingFactory overheadIncome tax expenseSales salaries and commissionsSales		- Select -
Cost of goods sold			fill in the blank 760c5ffc4f9c02f_9
Gross profit			$fill in the blank 760c5ffc4f9c02f_10
Operating expenses:
Selling expenses:
Income tax expenseNet lossSales salaries and commissionsSalesSupplies	$- Select -
AdvertisingDirect laborDirect materialsFactory overheadNet loss	- Select -
Gross profitIncome tax expenseMiscellaneous selling expenseSalesSupplies	- Select -
Total selling expenses		$fill in the blank 760c5ffc4f9c02f_17
Administrative expenses:
AdvertisingIncome tax expenseOffice and officers salariesSales salaries and commissionsSales	$- Select -
AdvertisingDirect materialsFactory overheadNet lossSupplies	- Select -
Gross profitIncome tax expenseMiscellaneous administrative expenseMiscellaneous selling expenseSales	- Select -
Total administrative expenses		fill in the blank 760c5ffc4f9c02f_24
Total operating expenses			fill in the blank 760c5ffc4f9c02f_25
Income before income tax			$fill in the blank 760c5ffc4f9c02f_26
AdvertisingDirect materialsFactory overheadIncome tax expenseSupplies			- Select -
Gross profitNet incomeNet loss			$- Select -

2. Prepare a budgeted balance sheet as of December 31, 20Y4.

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4
Assets
Current assets:
Accounts payableCashCommon stockMaterialsPlant and equipment		$fill in the blank e1ec51fc6ff5fce_2
Accounts payableAccounts receivablePlant and equipmentRetained earningsWork in process		fill in the blank e1ec51fc6ff5fce_4
Inventories:
Accumulated depreciationCashCommon stockFinished goodsPlant and equipment	$fill in the blank e1ec51fc6ff5fce_6
Accounts payableCashPlant and equipmentPrepaid expensesWork in process	fill in the blank e1ec51fc6ff5fce_8
Accounts payableCashCommon stockMaterialsPlant and equipment	fill in the blank e1ec51fc6ff5fce_10	fill in the blank e1ec51fc6ff5fce_11
Accounts payablePlant and equipmentPrepaid expensesRetained earningsWork in process		fill in the blank e1ec51fc6ff5fce_13
Total current assets			fill in the blank e1ec51fc6ff5fce_14
Property, plant, and equipment:
Accounts receivableCashCommon stockMaterialsPlant and equipment		$fill in the blank e1ec51fc6ff5fce_16
Less accounts payableLess accumulated depreciationLess prepaid expensesLess retained earningsLess work in process		fill in the blank e1ec51fc6ff5fce_18	fill in the blank e1ec51fc6ff5fce_19
Total assets			$fill in the blank e1ec51fc6ff5fce_20
Liabilities
Current liabilities:
Accounts payableCashCommon stockMaterialsPlant and equipment			$fill in the blank e1ec51fc6ff5fce_22
Stockholders' Equity
Accounts payableAccumulated depreciationCommon stockPlant and equipmentPrepaid expenses		$fill in the blank e1ec51fc6ff5fce_24
Accumulated depreciationCashPlant and equipmentPrepaid expensesRetained earnings		fill in the blank e1ec51fc6ff5fce_26
Total stockholders equity			fill in the blank e1ec51fc6ff5fce_27
Total liabilities and stockholders equity