Budgeted income statement and balance sheet

As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January $1,20$Y$9,$ the following tentative trial balance as of December $31,20$Y$8,$ is prepared by the Accounting Department of Regina Soap Co$.$:

Account Title Debit Balance Credit Balance

Cash $$113,600$

Accounts Receivable $206,800$

Finished Goods $43,400$

Work in Process $29,000$

Materials $47,600$

Prepaid Expenses $3,500$

Plant and Equipment $564,600$

Accumulated Depreciation$$Plant and Equipment $$242,800$

Accounts Payable $201,100$

Common Stock, $$10$ par $250,000$

Retained Earnings $314,600$

Total $$1,008,500$ $$1,008,500$

Factory output and sales for $20$Y$9$ are expected to total $27,000$ units of product, which are to be sold at $$100$ per unit. The quantities and costs of the inventories at December $31,20$Y$9,$ 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

Line Item Description 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 $$27,000\_$

Other factory overhead $8,4004\mathrm{.}5$

Selling expenses:

Sales salaries and commissions $96,90012\mathrm{.}5$

Advertising $81,000\_$

Miscellaneous selling expense $7,0002$

Administrative expenses:

Office and officers salaries $63,7006\mathrm{.}5$

Supplies $3,2001$

Miscellaneous administrative expense $1,7001\mathrm{.}5$

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 $$229,200$ on $20$Y$9$ taxable income will be paid during $20$Y$9.$ Regular quarterly cash dividends of $$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 $$152,000$ cash in May.

Required:

Question Content Area

$1.$ Prepare a budgeted income statement for $20$Y$9.$