Managerial Accounting
Budgeted Income Statement and Balance Sheet As a preliminary to requesting budget estimates of sales, costs, and expenses for the scal year beginning January 1, 20Y9, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.: Cash $104,300 Accounts Receivable 186,700 Finished Goods 39,200 Work in Process 26,100 Materials 42,900 Prepaid Expenses 3,200 Plant and Equipment 462,000 Accumulated DepreciationPlant and Equlpment Accounts Payable Common Stock, $10 par Retained Earnings Factory output and sales for 20Y9 are expected to total 23,000 units of product. which are to be sold at $100 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: Cost of goods manufactured and sold: Direct materials Direct labor Factory overhead: $864,400 Fixed Depreciation of plant and equipment $23,000 Other factory overhead 7,100 Selling expenses: Sales salaries and commissions 82,600 Advertising 69,000 Miscellaneous selling expense 6,000 Administrative expenses: Ofce and ofcers salaries 54,300 Supplies 2,800 Miscellaneous administrative expense 1,400 Balances of accounts receivable, prepaid expenses, and accounts payable at the end of the year are not expected to differ signicantly from the beginning balances. Federal income tax of $195,200 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends $198,700 162,100 250,000 253,600 $864,400 Estimated Costs and Expenses Variable (Total for Year) (Per Unit Sold) $25 8 4.5 12.5 6.5 1 1.5 Assets Current assets: Cash V 353,900 X Accounts receivable v 186,700 Inventories: Finished goods v $ 39,200 Work in process v 26,100 Materials V 42,900 108,200 Prepaid expenses v 3,200 Total current assets $ 652,000 X Property, plant, and equipment: Plant and equipment v 587,000 Accumulated depreciation v 221,700 Total property, plant, and equipment 365,300 Total assets $ 1,017,300 X Liabilities Current liabilities: Accounts payable v $ 162,100 Stockholders' Equity Common stock v 250,000 Retained earnings v 605,200 X Total stockholders' equity 855,200 X Total liabilities and stockholders' equity $ 1,017,300 Xof $1 per share are expected to be declared and paid in March, June, September, and December on 25,000 shares of common stock outstanding. [t is anticipated that xed assets will be purchased for $125,000 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 J $- \\/ Cost of goods sold: Direct materials J $- 1/ Direct labor J V/ > Factory overhead J 133.600 V/ Cost of goods sold 892.600 V/ Gross prot $ 1.407.400 V/ Operating expenses: Selling expenses: Sales salaries and commissions J $ 370,109 J Advertising J J Miscellaneous selling expense J X Total selling expenses $- X Administrative expenses: Ofce and ofcers salaries J $- V! Supplies J V Miscellaneous administrative expense J J Total administrative expenses 165.500 1' Total operating expenses X Income before income tax $ 646.800 X Income tax expense J m J Net income J $- X Feedback 1. 2. Prepare a budgeted balance sheet as of December 31, 20Y9
