eBook Calculator 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, 2084, the following tentative trial balance as of December 31, 2043, is prepared by the Accounting Department of Regina Soap Co.: Cash $99,800 Accounts Receivable 181,600 Finished Goods 38,100 Work in Process 25,400 Materials Prepaid Expenses 41,800 3,100 512,000 Plant and Equipment Accumulated Depreciation--Plant and Equipment Accounts Payable Common Stock, $10 par $220,200 148,800 300,000 232,800 $901,800 Retained Earnings $901,800 Factory output and sales for 2014 are expected to total 24,000 units of product, which are to be sold at $90 per unit. The quantities and costs of the inventories at December 31, 2044, 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 Factory overhead: Depreciation of plant and equipment Other factory overhead $24,000 7,400 Selling expenses: Sales salaries and commissions 11.5 Advertising 86,200 72,000 6,200 Miscellaneous selling expense Administrative expenses: Office and officers salaries Supplies 56,600 5.5 Miscellaneous administrative expense 2,900 1,500 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 $171,400 on 2014 taxable income will be paid during 2014. 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 $138,000 cash in May. Requirea! 1. Prepare a budgeted income statement for 20Y4. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2044 Sales $ 2,160,000 Cost of goods sold: Direct materials 552,000 Direct labor 168,000 127,400 Factory overhead Cost of goods sold 847,400 $ 1,312,600 Gross profit Operating expenses: Selling expenses: Sales salaries and commissions 362,200 Advertising 72,000 Miscellaneous selling expense 54,200 Total selling expenses Administrative expenses: Office and officers salaries $ 188,600 Supplies 26,900 Miscellaneous administrative expense 37.500 Total administrative expenses 253,000 Total operating expenses 741,400 Income before income tax Income tax expense 571,200 171.400 Net Income 399,00 2. Prepare a budgeted balance sheet as of December 31, 2014 Regina Soap Co. Budgeted Balance Sheet December 31, 2014 Assets Current assets: Cash 168,800 181,600 Accounts receivable Inventories: Finished goods 38,100 Work in process 25,400 41,800 Materials 105,300 Prepaid expenses 3,100 Total current assets Property, plant, and equipment: Plant and equipment er (30,0 4 quarte Less accumulated depreciation Total assets End budgete Liabilities Current liabilities: Accounts payable 148,800 Stockholders' Equity the year Common stock 300,000 Retained earnings and Accu Total stockholders' equity Total abilities and stockholders' equity