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.:

Cash	$99,600
Accounts Receivable	173,300
Finished Goods	36,400
Work in Process	24,300
Materials	39,900
Prepaid Expenses	2,900
Plant and Equipment	500,000
Accumulated DepreciationPlant and Equipment			$215,000
Accounts Payable			121,400
Common Stock, $10 par			350,000
Retained Earnings			190,000
	$876,400		$876,400

Factory output and sales for 20Y9 are expected to total 24,000 units of product, which are to be sold at $100 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:

	Estimated Costs and Expenses
	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	$24,000		_
Other factory overhead	7,400		4.5
Selling expenses:
Sales salaries and commissions	86,200		12.5
Advertising	72,000		_
Miscellaneous selling expense	6,200		2
Administrative expenses:
Office and officers salaries	56,600		6.5
Supplies	2,900		1
Miscellaneous administrative expense	1,500		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 $203,800 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 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $135,000 cash in May.

Required:

1. Prepare a budgeted income statement for 20Y9.

Regina Soap Co.
Budgeted Income Statement
For the Year Ending December 31, 20Y9
Sales			$fill in the blank 5f83c4fc500afc1_2
Cost of goods sold:
Direct materials		$fill in the blank 5f83c4fc500afc1_4
Direct labor		fill in the blank 5f83c4fc500afc1_6
Factory overhead		fill in the blank 5f83c4fc500afc1_8
Cost of goods sold			fill in the blank 5f83c4fc500afc1_9
Gross profit			$fill in the blank 5f83c4fc500afc1_10
Operating expenses:
Selling expenses:
Sales salaries and commissions	$fill in the blank 5f83c4fc500afc1_12
Advertising	fill in the blank 5f83c4fc500afc1_14
Miscellaneous selling expense	fill in the blank 5f83c4fc500afc1_16
Total selling expenses		$fill in the blank 5f83c4fc500afc1_17
Administrative expenses:
Office and officers salaries	$fill in the blank 5f83c4fc500afc1_19
Supplies	fill in the blank 5f83c4fc500afc1_21
Miscellaneous administrative expense	fill in the blank 5f83c4fc500afc1_23
Total administrative expenses		fill in the blank 5f83c4fc500afc1_24
Total operating expenses			fill in the blank 5f83c4fc500afc1_25
Income before income tax			$fill in the blank 5f83c4fc500afc1_26
Income tax expense			fill in the blank 5f83c4fc500afc1_28
Net income