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	$113,300
Accounts Receivable	208,500
Finished Goods	43,800
Work in Process	29,200
Materials	48,000
Prepaid Expenses	3,500
Plant and Equipment	504,200
Accumulated DepreciationPlant and Equipment			$216,800
Accounts Payable			149,600
Common Stock, $10 par			350,000
Retained Earnings			234,100
	$950,500		$950,500

Factory output and sales for 20Y9 are expected to total 26,000 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	$26,000		_
Other factory overhead	8,100		5.5
Selling expenses:
Sales salaries and commissions	93,300		15
Advertising	78,000		_
Miscellaneous selling expense	6,800		2.5
Administrative expenses:
Office and officers salaries	61,400		7.5
Supplies	3,100		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 $283,100 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 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $136,000 cash in May.

$ 3,120,000 1,204,100 1,915,900 Budgeted Income Statement For the Year Ending December 31, 2049 Sales Cost of goods sold: Direct materials 780,000 Direct labor 247,000 Factory overhead 177,100 Cost of goods sold Gross profit Operating expenses: Selling expenses: Sales salaries and commissions 483,300 Advertising 78,000 Miscellaneous selling expense 71,800 Total selling expenses 633,100 Administrative expenses: Office and officers salaries 256,400 Supplies 29,100 Miscellaneous administrative expense 53,600 Total administrative expenses 339,100 Total operating expenses Income before income tax Income tax expense Net income 972,200 943,700 283,100 $ 660,600 Assets Current assets: 1,370, Cash Accounts receivable Inventories: Finished goods Work in process Materials Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment Accumulated depreciation Total property, plant, and equipment Total assets $ Liabilities Current liabilities: Accounts payable v Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $