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, 2049, the following tentative trial balance as of December 31, 2018, is prepared by the Accounting Department of Regina Soap Co.: Cash $101,100 194,100 Accounts Receivable Finished Goods Work in Process 40,800 27,200 44,600 3,300 Materials 503,500 Prepaid Expenses Plant and Equipment Accumulated Depreciation-Plant and Equipment Accounts Payable Common Stock, $10 par Retained Earnings $216,500 174,800 250,000 273,300 $914,600 $914,600 Factory output and sales for 2049 are expected to total 25,000 units of product, which are to be sold at $110 per unit. The quantities and costs of the inventories at December 31, 2019, 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: $28 Direct materials Direct labor 8.5 Factory overhead: Depreciation of plant and equipment $25,000 7,800 Other factory overhead Selling expenses: Sales salaries and commissions 89,800 Advertising 75,000 6,500 Miscellaneous selling expense Administrative expenses: Office and officers salaries Supplies Miscellaneous administrative expense 59,000 3,000 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 $242,200 on 2049 taxable income will be paid during 2049. 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 $136,000 cash in May. 1. Prepare a budgeted income statement for 2049. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2019 Sales Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit Operating expenses: Selling expenses: Sales salaries and commissions Advertising Miscellaneous selling expense Total selling expenses Administrative expenses: Office and officers salaries Supplies Miscellaneous administrative expense Miscellaneous administrative expense Total administrative expenses Total operating expenses Income before income tax Income tax expense Net income 2. Prepare a budgeted balance sheet as of December 31, 2049. Regina Soap Co. Budgeted Balance Sheet December 31, 2019 Assets Current assets: Cash Accounts receivable Inventories: Finished goods Work in process Materials Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment UA Accumulated depreciation Total property, plant, and equipment Total assets Liabilities Current liabilities: Accounts payable Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity