Question
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,
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 | $115,000 | ||
| Accounts Receivable | 225,400 | ||
| Finished Goods | 47,300 | ||
| Work in Process | 31,600 | ||
| Materials | 51,800 | ||
| Prepaid Expenses | 3,800 | ||
| Plant and Equipment | 540,500 | ||
| Accumulated DepreciationPlant and Equipment | $232,400 | ||
| Accounts Payable | 168,900 | ||
| Common Stock, $10 par | 350,000 | ||
| Retained Earnings | 264,100 | ||
| $1,015,400 | $1,015,400 |
Factory output and sales for 20Y9 are expected to total 27,000 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 | $27,000 | _ | ||
| Other factory overhead | 8,400 | 5 | ||
| Selling expenses: | ||||
| Sales salaries and commissions | 96,900 | 14 | ||
| Advertising | 81,000 | _ | ||
| Miscellaneous selling expense | 7,000 | 2 | ||
| Administrative expenses: | ||||
| Office and officers salaries | 63,700 | 7 | ||
| Supplies | 3,200 | 1 | ||
| Miscellaneous administrative expense | 1,700 | 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 $261,600 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 $146,000 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 de9c3ffabf8206e_2 | ||
| Cost of goods sold: | |||
| Direct materials | $fill in the blank de9c3ffabf8206e_4 | ||
| Direct labor | fill in the blank de9c3ffabf8206e_6 | ||
| Factory overhead | fill in the blank de9c3ffabf8206e_8 | ||
| Cost of goods sold | fill in the blank de9c3ffabf8206e_9 | ||
| Gross profit | $fill in the blank de9c3ffabf8206e_10 | ||
| Operating expenses: | |||
| Selling expenses: | |||
| Sales salaries and commissions | $fill in the blank de9c3ffabf8206e_12 | ||
| Advertising | fill in the blank de9c3ffabf8206e_14 | ||
| Miscellaneous selling expense | fill in the blank de9c3ffabf8206e_16 | ||
| Total selling expenses | $fill in the blank de9c3ffabf8206e_17 | ||
| Administrative expenses: | |||
| Office and officers salaries | $fill in the blank de9c3ffabf8206e_19 | ||
| Supplies | fill in the blank de9c3ffabf8206e_21 | ||
| Miscellaneous administrative expense | fill in the blank de9c3ffabf8206e_23 | ||
| Total administrative expenses | fill in the blank de9c3ffabf8206e_24 | ||
| Total operating expenses | fill in the blank de9c3ffabf8206e_25 | ||
| Income before income tax | $fill in the blank de9c3ffabf8206e_26 | ||
| Income tax expense | fill in the blank de9c3ffabf8206e_28 | ||
| Net income | $fill in the blank de9c3ffabf8206e_30 | ||
Feedback
2. Prepare a budgeted balance sheet as of December 31, 20Y9.
| Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 | |||
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| Cash | $fill in the blank 415f0affbf7f04c_2 | ||
| Accounts receivable | fill in the blank 415f0affbf7f04c_4 | ||
| Inventories: | |||
| Finished goods | $fill in the blank 415f0affbf7f04c_6 | ||
| Work in process | fill in the blank 415f0affbf7f04c_8 | ||
| Materials | fill in the blank 415f0affbf7f04c_10 | fill in the blank 415f0affbf7f04c_11 | |
| Prepaid expenses | fill in the blank 415f0affbf7f04c_13 | ||
| Total current assets | $fill in the blank 415f0affbf7f04c_14 | ||
| Property, plant, and equipment: | |||
| Plant and equipment | $fill in the blank 415f0affbf7f04c_16 | ||
| Accumulated depreciation | fill in the blank 415f0affbf7f04c_18 | ||
| Total property, plant, and equipment | fill in the blank 415f0affbf7f04c_19 | ||
| Total assets | $fill in the blank 415f0affbf7f04c_20 | ||
| Liabilities | |||
| Current liabilities: | |||
| Accounts payable | $fill in the blank 415f0affbf7f04c_22 | ||
| Stockholders' Equity | |||
| Common stock | $fill in the blank 415f0affbf7f04c_24 | ||
| Retained earnings | fill in the blank 415f0affbf7f04c_26 | ||
| Total stockholders equity | fill in the blank 415f0affbf7f04c_27 | ||
| Total liabilities and stockholders equity | $fill in the blank 415f0affbf7f04c_28 | ||
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