Regina Soap Co.Budgeted Balance SheetDecember 31, 20Y4AssetsCurrent assets:Cash vAccounts receivable vInventories:Finished goods vWork in process VMaterials vPrepaid expenses vTotal current assetsProperty, plant, and equipment:Plant and equipment vLess accumulated depreciation VTotal assetSLiabilitiesCurrent liabilities:Accounts payableStockholders' Equity%24Common stock VRetained earnings vTotal stockholders' equity$4Total liabilities and stockholders' equity%24%24 Budgeted Income Statement and Balance SheetAs a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.:Cash$ 85,000Accounts Receivable125,600Finished Goods69,300Work in Process32,500Materials48,900Prepaid Expenses2,600Plant and Equipment325,000Accumulated Depreciation-Plant and Equipment$156,200Accounts Payable62,000Common Stock, $10 par180,000Retained Earnings290,700$688,900$688,900Factory output and sales for 20Y4 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, 20Y4, are expected to remain unchanged from the balances at the beginning of the yearBudget estimates of manufacturing costs and operating expenses for the year are summarized as follows:Estimated Costs and ExpensesFixedVariable(Total for Year) (Per Unit Sold)Cost of goods manufactured and sold:Direct materials$1.10Direct labor0.65Factory overhead:Depreciation of plant and equipment$40,000Other factory overhead12,0000.40Selling expenses:Sales salaries and commissions46,0000.45Advertising64,000Miscellaneous selling expense6,0000.25Administrative expenses:Office and officers salaries72,4000.12Supplies5,0000.10Miscellaneous administrative expense4,0000.05Balances 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 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $0.15per 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.Required:1. Prepare a budgeted income statement for 20Y4Regina Soap Co.Budgeted Income StatementFor the Year Ending December 31, 20Y4SalesCost of goods sold:Direct materialsDirect labor vFactory overheadCost of goods soldGross profitOperating expenses:Selling expenses:Sales salaries and commissionsAdvertisingMiscellaneous selling expense vTotal selling expensesAdministrative expenses:office and officers salariesSupplies vMiscellaneous administrative expense vTotal administrative expensesTotal operating expensesIncome before income taxIncome tax expense VNet income

Budgeted income statement is defined as the report which contains the list of the estimated…

32,300 Materials 48,900 Prepaid Expenses 2,600 Hant and Equipment 325,000 ccumulated Deprecation-Plant and Equipment $156,200 ccounts Payable 62,000 Common Stock $10 par 180,000 etained Earnings 290,700 $688,900 $688,900 actory output and sales for 20Y4 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, 20Y4, are udget estimates of manufecturing costs and operating expenses for the year are summarized as follows: Estimated Costs and Expenses Fixed Variable (Tetal for Year) (Per Unit Sold) ost of goods manufactured and sold Direct materials $1.10 Direct labor 0.65

32,300 Materials 48,900 Prepaid Expenses 2,600 Hant and Equipment 325,000 ccumulated Deprecation-Plant and Equipment $156,200 ccounts Payable 62,000 Common Stock $10 par 180,000 etained Earnings 290,700 $688,900 $688,900 actory output and sales for 20Y4 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, 20Y4, are udget estimates of manufecturing costs and operating expenses for the year are summarized as follows: Estimated Costs and Expenses Fixed Variable (Tetal for Year) (Per Unit Sold) ost of goods manufactured and sold Direct materials $1.10 Direct labor 0.65

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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