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	$112,700
Accounts Receivable	193,800
Finished Goods	40,700
Work in Process	27,100
Materials	44,600
Prepaid Expenses	3,300
Plant and Equipment	535,300
Accumulated DepreciationPlant and Equipment			$230,200
Accounts Payable			166,600
Common Stock, $10 par			300,000
Retained Earnings			260,700
	$957,500		$957,500

Factory output and sales for 20Y4 are expected to total 26,000 units of product, which are to be sold at $110 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	_		$28
Direct labor	_		8.5
Factory overhead:
Depreciation of plant and equipment	$26,000		_
Other factory overhead	8,100		5
Selling expenses:
Sales salaries and commissions	93,300		14
Advertising	78,000		_
Miscellaneous selling expense	6,800		2
Administrative expenses:
Office and officers salaries	61,400		7
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 $251,900 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 30,000 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.

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Cost of goods sold:

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Cost of goods sold			fill in the blank 4d211ef90fb3053_9
Gross profit			$fill in the blank 4d211ef90fb3053_10
Operating expenses:
Selling expenses:

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Total selling expenses		$fill in the blank 4d211ef90fb3053_17
Administrative expenses:

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Total administrative expenses		fill in the blank 4d211ef90fb3053_24
Total operating expenses			fill in the blank 4d211ef90fb3053_25
Income before income tax			$fill in the blank 4d211ef90fb3053_26

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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:

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Inventories:

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Total current assets			fill in the blank b5e636081008f98_14
Property, plant, and equipment:

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Total assets			$fill in the blank b5e636081008f98_20
Liabilities
Current liabilities:

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Stockholders' Equity

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Total stockholders equity			fill in the blank b5e636081008f98_27
Total liabilities and stockholders equity			$fill in the blank b5e636081008f98_28

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