Budgeted Income Statement and Balance Sheet

As a preliminary to requesting An accounting device used to plan and control resources of operational departments and divisions.budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2017, the following tentative trial balance as of December 31, 2016, is prepared by the Accounting Department of Webster Publishing Co.:

Cash	$119,300
Accounts Receivable	215,900
Finished Goods	45,300
Work in Process	30,200
Materials	49,700
Prepaid Expenses	3,700
Plant and Equipment	551,200
Accumulated DepreciationPlant and Equipment			$237,000
Accounts Payable			206,000
Common Stock, $10 par			250,000
Retained Earnings			322,300
	$1,015,300		$1,015,300

Factory output and sales for 2017 are expected to total 27,000 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 2017, 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	$27,000		_
Other factory overhead	8,400		5.5
Selling expenses:
Sales salaries and commissions	96,900		15
Advertising	81,000		_
Miscellaneous selling expense	7,000		2.5
Administrative expenses:
Office and officers salaries	63,700		7.5
Supplies	3,200		1
Miscellaneous administrative expense	1,700		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 $294,000 on 2017 taxable income will be paid during 2017. 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 $149,000 cash in May.

Part 1: Budgeted Income Statement 1. Prepare a budgeted income statement for 2017 Webster Publishing Co Budgeted Incone Statement For the Year Ending December 31, 2017 Cost of goods sold: Cost of goods sold Gross profit Operating expenses: Selling expenses Total selling expenses Administrative expenses: Total administrative expenses Total operating expenses Income before income tax