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, 2014, the following tentative trial balance as of December 31, 2013, is prepared by the Accounting Department of Regina Soap Co. Cash $119.700 Accounts Receivable 233,400 Finished Goods 49,000 Work in Process 32,700 Materials 53,700 4,000 Prepaid Expenses Plant and Equipment Accumulated Depreciation-Plant and Equipment 620,000 5266,600 212,900 Accounts Payable 300,000 Common Stock, $10 par 333,000 Retained Earnings $1,112,500 $1,112,500 Factory output and sales for 2014 are expected to total 30,000 units of product, which are to be sold at $100 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 Variable (Total for Year) (Per Unit Sold) Cost of goods manufactured and sold: Direct materials Direct labor $25 8 Factory overhead: $30,000 Depreciation of plant and equipment Other factory overhead 9,300 4.5 107,700 12.5 90,000 Selling expenses: Sales salaries and commissions Advertising Miscellaneous selling expense Administrative expenses: Office and officers salaries Supplies 7,800 2 70,800 6.5 3,600 1 Miscellaneous administrative expense 1,900 1.5 Balances of accounts receivable, prepald expenses, and accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of $254,700 on 2014 taxable income will be paid during 2074. 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 5167,000 cash in May Required: 1. Prepare a budgeted income statement for 2014 Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2014 Sales Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit Operating expenses: Selling expenses Sales salaries and commissions Advertising Factory overhead Cost of goods sold Gross profit Operating expenses: Selling expenses: Sales salaries and commissions Advertising Miscellaneous selling expense U Total selling expenses Administrative expenses: Office and officers salaries Supplies Miscellaneous administrative expense Total administrative expenses Total operating expenses Income before income tax Income tax expense Net income 2. Prepare a budgeted balance sheet as of December 31, 2014, Regina Soap Co. Budgeted Balance Sheet December 31, 2014 Assets Current assets: Cash Accounts receivable Inventories: Finished goods IN Work in process Materials Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment Work in process Materials Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment Less accumulated depreciation Total assets Liabilities Current liabilities: Accounts payable Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity