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	$109,500
Accounts Receivable	194,900
Finished Goods	40,900
Work in Process	27,300
Materials	44,800
Prepaid Expenses	3,300
Plant and Equipment	520,100
Accumulated DepreciationPlant and Equipment			$223,600
Accounts Payable			162,700
Common Stock, $10 par			300,000
Retained Earnings			254,500
	$940,800		$940,800

Factory output and sales for 20Y9 are expected to total 25,000 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	$25,000		_
Other factory overhead	7,800		5.5
Selling expenses:
Sales salaries and commissions	89,800		15
Advertising	75,000		_
Miscellaneous selling expense	6,500		2.5
Administrative expenses:
Office and officers salaries	59,000		7.5
Supplies	3,000		1
Miscellaneous administrative expense	1,600		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 $272,200 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 30,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $140,000 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

Gross profitIncome before income taxInterest expenseInterest revenueSalesSales			$Sales
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 7133cefb6026fc1_9
Gross profit			$fill in the blank 7133cefb6026fc1_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 7133cefb6026fc1_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 7133cefb6026fc1_24
Total operating expenses			fill in the blank 7133cefb6026fc1_25
Income before income tax			$fill in the blank 7133cefb6026fc1_26
AdvertisingDirect materialsFactory overheadIncome tax expenseSupplies			- Select -
Gross profitNet incomeNet loss			$- Select -

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

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9
Assets
Current assets:
Accounts payableCashCommon stockMaterialsPlant and equipment		$fill in the blank 94c82dffe03bfa5_2
Accounts payableAccounts receivablePlant and equipmentRetained earningsWork in process		fill in the blank 94c82dffe03bfa5_4
Inventories:
Accumulated depreciationCashCommon stockFinished goodsPlant and equipment	$fill in the blank 94c82dffe03bfa5_6
Accounts payableCashPlant and equipmentPrepaid expensesWork in process	fill in the blank 94c82dffe03bfa5_8
Accounts payableCashCommon stockMaterialsPlant and equipment	fill in the blank 94c82dffe03bfa5_10	fill in the blank 94c82dffe03bfa5_11
Accounts payablePlant and equipmentPrepaid expensesRetained earningsWork in process		fill in the blank 94c82dffe03bfa5_13
Total current assets			$fill in the blank 94c82dffe03bfa5_14
Property, plant, and equipment:
Accounts receivableCashCommon stockMaterialsPlant and equipment		$fill in the blank 94c82dffe03bfa5_16
Accounts payableAccumulated depreciationPrepaid expensesRetained earningsWork in process		fill in the blank 94c82dffe03bfa5_18
Total property, plant, and equipment			fill in the blank 94c82dffe03bfa5_19
Total assets			$fill in the blank 94c82dffe03bfa5_20
Liabilities
Current liabilities:
Accounts payableCashCommon stockMaterialsPlant and equipment			$fill in the blank 94c82dffe03bfa5_22
Stockholders' Equity
Accounts payableAccumulated depreciationCommon stockPlant and equipmentPrepaid expenses		$fill in the blank 94c82dffe03bfa5_24
Accumulated depreciationCashPlant and equipmentPrepaid expensesRetained earnings		fill in the blank 94c82dffe03bfa5_26
Total stockholders equity			fill in the blank 94c82dffe03bfa5_27
Total liabilities and stockholders equity			$fill in the blank 94c82dffe03bfa5_28