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, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.:

Cash	$116,200
Accounts Receivable	197,500
Finished Goods	41,500
Work in Process	27,700
Materials	45,400
Prepaid Expenses	3,400
Plant and Equipment	536,800
Accumulated DepreciationPlant and Equipment			$230,800
Accounts Payable			190,200
Common Stock, $10 par			250,000
Retained Earnings			297,500
	$968,500		$968,500

Factory output and sales for 20Y4 are expected to total 26,000 units of product, which are to be sold at $90 per unit. The quantities and costs of the inventories at December 31, 20Y4, 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	_		$23
Direct labor	_		7
Factory overhead:
Depreciation of plant and equipment	$26,000		_
Other factory overhead	8,100		4
Selling expenses:
Sales salaries and commissions	93,300		11.5
Advertising	78,000		_
Miscellaneous selling expense	6,800		2
Administrative expenses:
Office and officers salaries	61,400		5.5
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 $185,600 on 20Y4 taxable income will be paid during 20Y4. 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 $145,000 cash in May.

Required:

Question Content Area

1. Prepare a budgeted income statement for 20Y4.

Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4

Gross profitIncome before income taxInterest expenseInterest revenueSales			$- Select -
Cost of goods sold:
Direct materials or Income tax expense or Miscellaneous selling expense or Office and officers salaries or Supplies		$- Select -
Direct labor or Gross profit or Income tax expense or Miscellaneous administrative expense or Sales		- Select -
Advertising or Factory overheadIncome tax expense or Sales salaries and commissions or Sales		- Select -
Cost of goods sold			fill in the blank
Gross profit			$fill in the blank
Operating expenses:
Selling expenses:
Income tax expense or Net loss or Sales salaries and commissions or SalesSupplies	$- Select -
Advertising or Direct labor or Direct materials or Factory overhead or Net loss	- Select -
Gross profit or Income tax expense or Miscellaneous selling expense or SalesSupplies	- Select -
Total selling expenses		$fill in the blank
Administrative expenses:
Advertising or Income tax expense or Office and officers salaries or Sales salaries and commissions or Sales	$- Select -
Advertising or Direct materials or Factory overhead or Net lossSupplies	- Select -
Gross profit or Income tax expense or Miscellaneous administrative expense or Miscellaneous selling expense or Sales	- Select -
Total administrative expenses		fill in the blank
Total operating expenses			fill in the blank
Income before income tax			$fill in the blank
AdvertisingDirect materials or Factory overhead or Income tax expenseSupplies			- Select -
Gross profit or Net income or Net loss			$- Select -

Question Content Area

2. Prepare a budgeted balance sheet as of December 31, 20Y4.

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4
Assets
Current assets:
Accounts payable or Cash or Common stock or Materials or Plant and equipment		$fill in the blank
Accounts payable or Accounts receivable or Plant and equipment or Retained earnings or Work in process		fill in the blank
Inventories:
Accumulated depreciation or Cash or Common stock or Finished goods or Plant and equipment	$fill in the blank
Accounts payable or Cash or Plant and equipment or Prepaid expenses or Work in process	fill in the blank
Accounts payable or Cash or Common stock or Materials or Plant and equipment	fill in the blank	fill in the blank
Accounts payable or Plant and equipment or Prepaid expenses or Retained earnings or Work in process		fill in the blank
Total current assets			fill in the blank
Property, plant, and equipment:
Accounts receivable or Cash or Common stock or Materials or Plant and equipment		$fill in the blank
Less accounts payable or Less accumulated depreciation or Less prepaid expenses or Less retained earnings or Less work in process		fill in the blank	fill in the blank
Total assets			$fill in the blank
Liabilities
Current liabilities:
Accounts payable or Cash or Common stock or Materials or Plant and equipment			$fill in the blank
Stockholders' Equity
Accounts payable or Accumulated depreciation or Common stock or Plant and equipment or Prepaid expenses		$fill in the blank
Accumulated depreciation or Cash or Plant and equipment or Prepaid expenses or Retained earnings		fill in the blank
Total stockholders equity			fill in the blank
Total liabilities and stockholders equity			$fill in the blank