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	$119,600
Accounts Receivable	212,900
Finished Goods	44,700
Work in Process	29,800
Materials	49,000
Prepaid Expenses	3,600
Plant and Equipment	596,800
Accumulated DepreciationPlant and Equipment			$256,600
Accounts Payable			214,400
Common Stock, $10 par			250,000
Retained Earnings			335,400
	$1,056,400		$1,056,400

Factory output and sales for 20Y9 are expected to total 29,000 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:

	Estimated Costs and Expenses
	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	$29,000		_
Other factory overhead	9,000		5
Selling expenses:
Sales salaries and commissions	104,100		14
Advertising	87,000		_
Miscellaneous selling expense	7,500		2
Administrative expenses:
Office and officers salaries	68,400		7
Supplies	3,500		1
Miscellaneous administrative expense	1,800		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 $281,000 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 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $161,000 cash in May.

1. Prepare a budgeted income statement for 20Y9.

Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9

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			fill in the blank e0ef68f88020f9d_9
Gross profit			$fill in the blank e0ef68f88020f9d_10
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		$fill in the blank e0ef68f88020f9d_17
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		fill in the blank e0ef68f88020f9d_24
Total operating expenses			fill in the blank e0ef68f88020f9d_25
Income before income tax			$fill in the blank e0ef68f88020f9d_26
AdvertisingDirect materialsFactory overheadIncome tax expenseSuppliesIncome tax expense			Income tax expense
Gross profitNet incomeNet lossNet income			$Net income

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Use information from the expected sales, cost of goods manufactured and sold, and selling and administrative expenses.

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2. Prepare a budgeted balance sheet as of December 31, 20Y9.

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9
Assets
Current assets:
Accounts payableCashCommon stockMaterialsPlant and equipmentCash		$fill in the blank 3561c7ff204e000_2
Accounts payableAccounts receivablePlant and equipmentRetained earningsWork in processAccounts receivable		fill in the blank 3561c7ff204e000_4
Inventories:
Accumulated depreciationCashCommon stockFinished goodsPlant and equipmentFinished goods	$fill in the blank 3561c7ff204e000_6
Accounts payableCashPlant and equipmentPrepaid expensesWork in processWork in process	fill in the blank 3561c7ff204e000_8
Accounts payableCashCommon stockMaterialsPlant and equipmentMaterials	fill in the blank 3561c7ff204e000_10	fill in the blank 3561c7ff204e000_11
Accounts payablePlant and equipmentPrepaid expensesRetained earningsWork in processPrepaid expenses		fill in the blank 3561c7ff204e000_13
Total current assets			$fill in the blank 3561c7ff204e000_14
Property, plant, and equipment:
Accounts receivableCashCommon stockMaterialsPlant and equipmentPlant and equipment		$fill in the blank 3561c7ff204e000_16
Accounts payableAccumulated depreciationPrepaid expensesRetained earningsWork in processAccumulated depreciation		fill in the blank 3561c7ff204e000_18
Total property, plant, and equipment			fill in the blank 3561c7ff204e000_19
Total assets			$fill in the blank 3561c7ff204e000_20
Liabilities
Current liabilities:
Accounts payableCashCommon stockMaterialsPlant and equipmentAccounts payable			$fill in the blank 3561c7ff204e000_22
Stockholders' Equity
Accounts payableAccumulated depreciationCommon stockPlant and equipmentPrepaid expensesCommon stock		$fill in the blank 3561c7ff204e000_24
Accumulated depreciationCashPlant and equipmentPrepaid expensesRetained earningsRetained earnings		fill in the blank 3561c7ff204e000_26
Total stockholders equity			fill in the blank 3561c7ff204e000_27
Total liabilities and stockholders equity			$fill in the blank 3561c7ff204e000_28