**PR 22-5A Budgeted Income Statement and Balance Sheet** As part of preparing to request budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2017, the Accounting Department of Regina Soap Co. has prepared the following tentative trial balance as of December 31, 2016: - **Cash:** $85,000 - **Accounts Receivable:** $125,600 - **Finished Goods:** $69,300 - **Work in Process:** $32,500 - **Materials:** $48,900 - **Prepaid Expenses:** $2,600 - **Plant and Equipment:** $325,000 - **Accumulated Depreciation—Plant and Equipment:** $156,200 - **Accounts Payable:** $62,000 - **Common Stock, $10 par:** $180,000 - **Retained Earnings:** $290,700 The total balances for both debits and credits are $688,900. **Factory Output and Sales for 2017:** - Expected production and sales: 200,000 units - Selling price: $5.00 per unit - Inventory levels and costs as of December 31, 2017, are expected to remain the same as the beginning of the year. **Budget Estimates of Manufacturing Costs and Operating Expenses:** | Cost Element | Estimated Costs and Expenses | |-------------------------------------------------|-------------------------------| | | Fixed (Total for Year) | Variable (Per Unit Sold) | | **Cost of Goods Manufactured and Sold:** | | | - Direct Materials | — | $1.10 | | - Direct Labor | — | $0.65 | | **Factory Overhead:** | | | - Depreciation of Plant and Equipment | $40,000 | — | | - Other Factory Overhead | $12,000 | $0.40 | | **Selling Expenses:** | | | - Sales Salaries and Commissions | $46,000 | $0.45 | | - Advertising | $64,000 | — | | - Miscellaneous Selling Expense | $6,000 | $0.25 | | **Administrative Expenses:** | | | - Office and Officers Salaries | $72,400 | $0. **Regina Soap Co.** **Budgeted Income Statement** *For the Year Ending December 31, 2021* - **Sales** - **Cost of Goods Sold:** - Direct materials - Direct labor - Factory overhead - **Cost of Goods Sold Total** - **Gross Profit** - **Operating Expenses:** - **Selling Expenses:** - Sales salaries and commissions - Advertising - Miscellaneous selling expenses - **Total Selling Expenses** - **Administrative Expenses:** - Office and officers salaries - Supplies - Miscellaneous administrative expense - **Total Administrative Expenses** - **Total Operating Expenses** - **Income Before Income Tax** - **Income Tax Expense** - **Net Income** --- **Question 2** **Regina Soap Co.** **Budgeted Balance Sheet** *December 31, 2021* **ASSETS** - **Current Assets:** - Cash - Accounts receivable - **Inventories:** - Finished goods - Work in process - Materials - Prepaid expenses - **Total Current Assets** - **Property, Plant, and Equipment:** - Plant and equipment - Less accumulated depreciation - **Total Assets** **LIABILITIES** - **Current Liabilities:** - Accounts payable **STOCKHOLDERS’ EQUITY** - Common stock - Retained earnings - **Total Stockholders’ Equity** - **Total Liabilities and Stockholders’ Equity** This document outlines both a budgeted income statement and balance sheet for Regina Soap Co., detailing projections for sales, costs, operating expenses, assets, liabilities, and stockholders’ equity for the year ending December 31, 2021.