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, 2049, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Regina Soap Co.: Cash $115,500 Accounts Receivable 198,700 Finished Goods 41,700 Work in Process 27,800 Materials 45,700 Prepaid Expenses Plant and Equipment 530,100 Accumulated Depreciation-Plant and Equipment $227,900 Accounts Payable 189,200 Common Stock, $10 par 250,000 Retained Earnings 295,800 $962,900 $962,900 3,400 Factory output and sales for 20y9 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, 2049, 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 Variable (Total for Year) (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 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 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 2049 taxable income will be paid during 2049. 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 $143,000 cash in May. 1.5 Required: 1. Prepare a budgeted income statement for 2049. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2019 Sales 2,340,000 Cost of goods sold: Direct materials 598,000 Direct labor 182,000 Factory overhead 138,100 1. Prepare a budgeted income statement for 2049. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2019 Sales 2,340,000 Cost of goods sold: Direct materials 598,000 Direct labor 182,000 Factory overhead 138,100 Cost of goods sold -918,100 1,421.900 Gross profit Operating expenses: Selling expenses: Sales salaries and commissions 392,000 x Advertising 78,000 Miscellaneous selling expense 58,800 528,800 x Total selling expenses Administrative expenses: Office and officers salaries 204,400 29,100 Supplies Miscellaneous administrative expense 40,600 Total administrative expenses 274,100 Total operating expenses -802,900 x Income before income tax Income tax expense 619,000 X -185,600 Net income 433,400 x 2. Prepare a budgeted balance sheet as of December 31, 2049. Regina Soap Co. Budgeted Balance Sheet December 31, 2019 Assets Current assets: Cash Accounts receivable 198,700 Inventories: Finished goods Work in process 41,700 27,800 Materials 45,700 115,200 3,400 649,200 x Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment 673,100 Accumulated depreciation 253,900 419,200 Total property, plant, and equipment Total assets 1,068,400 x Liabilities Current liabilities: Accounts payable 189,200 Stockholders' Equity Common stock 250,000 Retained earnings 629,200 x Total stockholders' equity 879,200 x Total liabilities and stockholders' equity 1,068,400 x