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

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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:
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