Question
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,
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.:
Account Title | Debit Balance | Credit Balance |
---|---|---|
Cash | $104,500 | |
Accounts Receivable | 186,000 | |
Finished Goods | 39,100 | |
Work in Process | 26,000 | |
Materials | 42,800 | |
Prepaid Expenses | 3,200 | |
Plant and Equipment | 506,800 | |
Accumulated DepreciationPlant and Equipment | $217,900 | |
Accounts Payable | 152,300 | |
Common Stock, $10 par | 300,000 | |
Retained Earnings | 238,200 | |
Total | $908,400 | $908,400 |
Factory output and sales for 20Y9 are expected to total 25,000 units of product, which are to be sold at $110 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:
Line Item Description | 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 | $25,000 | _ |
Other factory overhead | 7,800 | 5 |
Selling expenses: | ||
Sales salaries and commissions | 89,800 | 14 |
Advertising | 75,000 | _ |
Miscellaneous selling expense | 6,500 | 2 |
Administrative expenses: | ||
Office and officers salaries | 59,000 | 7 |
Supplies | 3,000 | 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 $242,200 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 30,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $137,000 cash in May.
Required:
Question Content Area
1. Prepare a budgeted income statement for 20Y9.
Line Item Description | Amount | Amount | Amount |
---|---|---|---|
Gross profitIncome before income taxInterest expenseInterest revenueSalesSales | $Sales | ||
Cost of goods sold: | |||
Direct materialsIncome tax expenseMiscellaneous selling expenseOffice and officers salariesSuppliesDirect materials | $Direct materials | ||
Direct laborGross profitIncome tax expenseMiscellaneous administrative expenseSalesDirect labor | Direct labor | ||
AdvertisingFactory overheadIncome tax expenseSales salaries and commissionsSalesFactory overhead | Factory overhead | ||
Cost of goods sold | Cost of goods sold | ||
Gross profit | $Gross profit | ||
Operating expenses: | |||
Selling expenses: | |||
Income tax expenseNet lossSales salaries and commissionsSalesSuppliesSales salaries and commissions | $Sales salaries and commissions | ||
AdvertisingDirect laborDirect materialsFactory overheadNet lossAdvertising | Advertising | ||
Gross profitIncome tax expenseMiscellaneous selling expenseSalesSuppliesMiscellaneous selling expense | Miscellaneous selling expense | ||
Total selling expenses | $Total selling expenses | ||
Administrative expenses: | |||
AdvertisingIncome tax expenseOffice and officers salariesSales salaries and commissionsSalesOffice and officers salaries | $Office and officers salaries | ||
AdvertisingDirect materialsFactory overheadNet lossSuppliesSupplies | Supplies | ||
Gross profitIncome tax expenseMiscellaneous administrative expenseMiscellaneous selling expenseSalesMiscellaneous administrative expense | Miscellaneous administrative expense | ||
Total administrative expenses | Total administrative expenses | ||
Total operating expenses | Total operating expenses | ||
Income before income tax | $Income before income tax | ||
AdvertisingDirect materialsFactory overheadIncome tax expenseSuppliesIncome tax expense | Income tax expense | ||
Gross profitNet incomeNet lossNet income | $Net income |
Feedback Area
Feedback
Use information from the expected sales, cost of goods manufactured and sold, and selling and administrative expenses.
Question Content Area
2. Prepare a budgeted balance sheet as of December 31, 20Y9.
Line Item Description | Amount | Amount | Amount |
---|---|---|---|
Assets | |||
Current assets: | |||
fill in the blank 1 of 28 Accounts payableCashCommon stockMaterialsPlant and equipmentCash | fill in the blank 2 of 28$ | ||
fill in the blank 3 of 28 Accounts payableAccounts receivablePlant and equipmentRetained earningsWork in processAccounts receivable | fill in the blank 4 of 28 | ||
Inventories: | |||
fill in the blank 5 of 28 Accumulated depreciationCashCommon stockFinished goodsPlant and equipmentFinished goods | fill in the blank 6 of 28$ | ||
fill in the blank 7 of 28 Accounts payableCashPlant and equipmentPrepaid expensesWork in processWork in process | fill in the blank 8 of 28 | ||
fill in the blank 9 of 28 Accounts payableCashCommon stockMaterialsPlant and equipmentMaterials | fill in the blank 10 of 28 | ||
Total | fill in the blank 11 of 28 | ||
fill in the blank 12 of 28 Accounts payablePlant and equipmentPrepaid expensesRetained earningsWork in processPrepaid expenses | fill in the blank 13 of 28 | ||
Total current assets | fill in the blank 14 of 28$ | ||
Property, plant, and equipment: | |||
fill in the blank 15 of 28 Accounts receivableCashCommon stockMaterialsPlant and equipmentPlant and equipment | fill in the blank 16 of 28$ | ||
fill in the blank 17 of 28 Accounts payableAccumulated depreciationPrepaid expensesRetained earningsWork in processAccumulated depreciation | fill in the blank 18 of 28 | ||
Total property, plant, and equipment | fill in the blank 19 of 28 | ||
Total assets | fill in the blank 20 of 28$ | ||
Liabilities | |||
Current liabilities: | |||
fill in the blank 21 of 28 Accounts payableCashCommon stockMaterialsPlant and equipmentAccounts payable | fill in the blank 22 of 28$ | ||
Stockholders' Equity | |||
fill in the blank 23 of 28 Accounts payableAccumulated depreciationCommon stockPlant and equipmentPrepaid expensesCommon stock | fill in the blank 24 of 28$ | ||
fill in the blank 25 of 28 Accumulated depreciationCashPlant and equipmentPrepaid expensesRetained earningsRetained earnings | fill in the blank 26 of 28 | ||
Total stockholders equity | fill in the blank 27 of 28 | ||
Total liabilities and stockholders equity | fill in the blank 28 of 28$ |
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