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, 2015, the following tentative trial balance as of December 31, 2014, is prepared by the Accounting Department of Webster Publishing Co.:

Cash	$106,200
Accounts Receivable	183,700
Finished Goods	38,600
Work in Process	25,700
Materials	42,300
Prepaid Expenses	3,100
Plant and Equipment	494,900
Accumulated DepreciationPlant and Equipment			$212,800
Accounts Payable			168,400
Common Stock, $10 par			250,000
Retained Earnings			263,300
	$894,500		$894,500

Factory output and sales for 2015 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, 2015, 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	_		$23.00
Direct labor	_		7.00
Factory overhead:
Depreciation of plant and equipment	$24,000		_
Other factory overhead	7,400		4.00
Selling expenses:
Sales salaries and commissions	86,200		11.50
Advertising	72,000		_
Miscellaneous selling expense	6,200		2.00
Administrative expenses:
Office and officers salaries	56,600		5.50
Supplies	2,900		1.00
Miscellaneous administrative expense	1,500		1.50

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 2015 taxable income will be paid during 2015. Regular quarterly cash dividends of $1.00 per share are expected to be declared and paid in March, June, September, and December on 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $134,000 cash in May.

1. Prepare a budgeted income statement for 2015

2. Prepare a budgeted balance sheet as of December 31, 2015.

Webster Publishing Co. Budgeted Income Statement For the Year Ending December 31, 2015 Sales 2160000 Cost of goods sold: Direct materials 552000 Direct labar 168000 Factory overhead Cost of goods sold Gross profit Operating expenses: Selling expenses Sales salaries and commission: Advertising 72000 Miscellaneous selling expense Total selling expenses Administrative expenses: [Office and officers salaries Supplies Mscelaneous administrative Miscellaneous administrative e Total administrative expenses Total operating expenses Income before income tax ncome tax expense 171400 Net income