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, thefollowing tentative trial balance as of December 31, 20Y8, isprepared by the Accounting Department of Regina Soap Co.:

Cash	$113,800
Accounts Receivable	223,000
Finished Goods	46,800
Work in Process	31,200
Materials	51,300
Prepaid Expenses	3,800
Plant and Equipment	523,500
Accumulated Depreciation—Plant and Equipment			$225,100
Accounts Payable			202,100
Common Stock, $10 par			250,000
Retained Earnings			316,200
	$993,400		$993,400

Factory output and sales for 20Y9 are expected to total 27,000units of product, which are to be sold at $100 per unit. Thequantities and costs of the inventories at December 31, 20Y9, areexpected to remain unchanged from the balances at the beginning ofthe year.

Budget estimates of manufacturing costs and operating expensesfor 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	$27,000		_
Other factory overhead	8,400		4.5
Selling expenses:
Sales salaries and commissions	96,900		12.5
Advertising	81,000		_
Miscellaneous selling expense	7,000		2
Administrative expenses:
Office and officers salaries	63,700		6.5
Supplies	3,200		1
Miscellaneous administrative expense	1,700		1.5

Balances of accounts receivable, prepaid expenses, and accountspayable at the end of the year are not expected to differsignificantly from the beginning balances. Federal income tax of$229,200 on 20Y9 taxable income will be paid during 20Y9. Regularquarterly cash dividends of $1 per share are expected to bedeclared and paid in March, June, September, and December on 25,000shares of common stock outstanding. It is anticipated that fixedassets will be purchased for $141,000 cash in May.

Required:

1. Prepare a budgeted income statement for20Y9.

Regina Soap Co.
Budgeted Income Statement
For the Year Ending December 31, 20Y9
			$
Cost of goods sold:
		$
Cost of goods sold
Gross profit			$
Operating expenses:
Selling expenses:
	$
Total selling expenses		$
Administrative expenses:
	$
Total administrative expenses
Total operating expenses
Income before income tax			$
			$

2. Prepare a budgeted balance sheet as ofDecember 31, 20Y9.

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9
Assets
Current assets:
		$
Inventories:
	$
Total current assets			$
Property, plant, and equipment:
		$
Total property, plant, and equipment
Total assets			$
Liabilities
Current liabilities:
			$
Stockholders' Equity
		$
Total stockholders’ equity
Total liabilities and stockholders’ equity			$