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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, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.:

Cash	$102,000
Accounts Receivable	203,000
Finished Goods	42,600
Work in Process	28,400
Materials	46,700
Prepaid Expenses	3,500
Plant and Equipment	468,200
Accumulated DepreciationPlant and Equipment			$201,300
Accounts Payable			153,300
Common Stock, $10 par			300,000
Retained Earnings			239,800
	$894,400		$894,400

Factory output and sales for 20Y4 are expected to total 24,000 units of product, which are to be sold at $100 per unit. The quantities and costs of the inventories at December 31, 20Y4, 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	_		$25
Direct labor	_		8
Factory overhead:
Depreciation of plant and equipment	$24,000		_
Other factory overhead	7,400		4.5
Selling expenses:
Sales salaries and commissions	86,200		12.5
Advertising	72,000		_
Miscellaneous selling expense	6,200		2
Administrative expenses:
Office and officers salaries	56,600		6.5
Supplies	2,900		1
Miscellaneous administrative expense	1,500		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 $203,800 on 20Y4 taxable income will be paid during 20Y4. 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 $126,000 cash in May.

1. Prpnarp a hidnpted Inrnme ctatempnt for 2IY4