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	$111,700
Accounts Receivable	216,700
Finished Goods	45,500
Work in Process	30,300
Materials	49,800
Prepaid Expenses	3,700
Plant and Equipment	516,100
Accumulated DepreciationPlant and Equipment			$221,900
Accounts Payable			176,200
Common Stock, $10 par			300,000
Retained Earnings			275,700
	$973,800		$973,800

Factory output and sales for 20Y9 are expected to total 26,000 units of product, which are to be sold at $100 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	_		$25
Direct labor	_		8
Factory overhead:
Depreciation of plant and equipment	$26,000		_
Other factory overhead	8,100		4.5
Selling expenses:
Sales salaries and commissions	93,300		12.5
Advertising	78,000		_
Miscellaneous selling expense	6,800		2
Administrative expenses:
Office and officers salaries	61,400		6.5
Supplies	3,100		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 $220,700 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 $139,000 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 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 dece14077016fcb_9
Gross profit			$fill in the blank dece14077016fcb_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 dece14077016fcb_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 dece14077016fcb_24
Total operating expenses			fill in the blank dece14077016fcb_25
Income before income tax			$fill in the blank dece14077016fcb_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
Accounts payableAccounts receivablePlant and equipmentRetained earningsWork in process
Inventories:
Accumulated depreciationCashCommon stockFinished goodsPlant and equipment
Accounts payableCashPlant and equipmentPrepaid expensesWork in process
Accounts payableCashCommon stockMaterialsPlant and equipment
Accounts payablePlant and equipmentPrepaid expensesRetained earningsWork in process
Total current assets
Property, plant, and equipment:
Accounts receivableCashCommon stockMaterialsPlant and equipment
Accounts payableAccumulated depreciationPrepaid expensesRetained earningsWork in process
Total property, plant, and equipment
Total assets
Liabilities
Current liabilities:
Accounts payableCashCommon stockMaterialsPlant and equipment
Stockholders' Equity
Accounts payableAccumulated depreciationCommon stockPlant and equipmentPrepaid expenses
Accumulated depreciationCashPlant and equipmentPrepaid expensesRetained earnings
Total stockholders equity
Total liabilities and stockholders equity