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, 2017, the following tentative trial balance as of December 31, 2016, is prepared by the Accounting Department of Webster Publishing Co.:

Cash	$103,200
Accounts Receivable	195,000
Finished Goods	41,000
Work in Process	27,300
Materials	44,900
Prepaid Expenses	3,300
Plant and Equipment	483,000
Accumulated DepreciationPlant and Equipment			$207,700
Accounts Payable			152,100
Common Stock, $10 par			300,000
Retained Earnings			237,900
	$897,700		$897,700

Factory output and sales for 2017 are expected to total 24,000 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 2017, 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	_		$30
Direct labor	_		9.5
Factory overhead:
Depreciation of plant and equipment	$24,000		_
Other factory overhead	7,400		5.5
Selling expenses:
Sales salaries and commissions	86,200		15
Advertising	72,000		_
Miscellaneous selling expense	6,200		2.5
Administrative expenses:
Office and officers salaries	56,600		7.5
Supplies	2,900		1
Miscellaneous administrative expense	1,500		2

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 $261,400 on 2017 taxable income will be paid during 2017. 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 $130,000 cash in May.

Required:

Prepare a budgeted income statement for 2017.

Prepare a budgeted balance sheet as of December 31, 2017.

Prepare a budgeted income statement for 2017.

Webster Publishing Co.

Budgeted Income Statement

For the Year Ending December 31, 2017

$

Cost of goods sold:

$

Cost of goods sold

Gross profit

$

Operating expenses:

Selling expenses:

$

Total selling expenses

$

Administrative expenses:

$

Total administrative expenses

Total operating expenses

Income before income tax

$

Prepare a budgeted balance sheet as of December 31, 2017.

Webster Publishing Co. Budgeted Balance Sheet December 31, 2017
Assets
Current assets:
Inventories:
Total current assets
Property, plant, and equipment:
Total assets
Liabilities
Current liabilities:
Stockholders' Equity
Total stockholders equity
Total liabilities and stockholders equity

$