PR 22-5A 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 pre-pared by the Accounting Department of Regina Soap Co.:

Cash Accounts Receivable Finished Goods Work in Process Materials Prepaid Expenses Plant and Equipment Acc.Dep.Plant and Equip. Accounts Payable Common Stock, $10 par Retained Earnings	85,000 125,600 69,300 32,500 48,900 2,600 325,000 $688,900	$156,200 62,000 180,000 290,700 $688,900

Factory output and sales for 20Y9 are expected to total 200,000 units of product, which are to be sold at $5.00 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 Direct labor Factory overhead: Depreciat. plant and equip. Other factory overhead Selling expenses: Sales salaries & comisions Advertising Miscellaneous selling exp. Administrative expenses:Office and officers salaries Supplies Miscellaneous admin exp.	______ ______ $40,000 12,000 46,000 64,000 6,000 72,400 5,000 4,000	$1.10 0.65 ----- 0.40 0.45 ____ 0.25 0.12 0.10 0.05

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 $30,000 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $0.15 per share are expected to be declared and paid in March, June, September, and December on 18,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $75,000 cash in May.

Instructions

1. Prep. a budgeted income statement for 20Y9.

2. Prep. a budgeted balance sheet as of December 31, 20Y9, with supporting calculations.

Thanks