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, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.: Cash $119,200 Accounts Receivable 227,700 Finished Goods 47,800 Work in Process 31,900 Materials 52,400 Prepaid Expenses 3,900 Plant and Equipment 609,100 Accumulated Depreciation—Plant and Equipment $261,900 Accounts Payable 206,700 Common Stock, $10 par 300,000 Retained Earnings 323,400 $1,092,000 $1,092,000 Factory output and sales for 20Y4 are expected to total 29,000 units of product, which are to be sold at $90 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 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 Direct labor _ 7 Factory overhead: Depreciation of plant and equipment $29,000 _ Other factory overhead 9,000 4 Selling expenses: Sales salaries and commissions 104,100 11.5 Advertising 87,000 _ Miscellaneous selling expense 7,500 2 Administrative expenses: Office and officers salaries 68,400 5.5 Supplies 3,500 1 Miscellaneous administrative expense 1,800 1.5 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 $207,100 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 30,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $164,000 cash in May. Required: 1. Prepare a budgeted income statement for 20Y4. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4 $fill in the blank 8d1341ff8fcd030_2 Cost of goods sold: $fill in the blank 8d1341ff8fcd030_4 fill in the blank 8d1341ff8fcd030_6 fill in the blank 8d1341ff8fcd030_8 Cost of goods sold fill in the blank 8d1341ff8fcd030_9 Gross profit $fill in the blank 8d1341ff8fcd030_10 Operating expenses: Selling expenses: $fill in the blank 8d1341ff8fcd030_12 fill in the blank 8d1341ff8fcd030_14 fill in the blank 8d1341ff8fcd030_16 Total selling expenses $fill in the blank 8d1341ff8fcd030_17 Administrative expenses: $fill in the blank 8d1341ff8fcd030_19 fill in the blank 8d1341ff8fcd030_21 fill in the blank 8d1341ff8fcd030_23 Total administrative expenses fill in the blank 8d1341ff8fcd030_24 Total operating expenses fill in the blank 8d1341ff8fcd030_25 Income before income tax $fill in the blank 8d1341ff8fcd030_26 fill in the blank 8d1341ff8fcd030_28 $fill in the blank 8d1341ff8fcd030_30 2. Prepare a budgeted balance sheet as of December 31, 20Y4. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4 Assets Current assets: fill in the blank 42b831075fdaf85_2 fill in the blank 42b831075fdaf85_4 Inventories: fill in the blank 42b831075fdaf85_6 fill in the blank 42b831075fdaf85_8 fill in the blank 42b831075fdaf85_10 fill in the blank 42b831075fdaf85_11 fill in the blank 42b831075fdaf85_13 Total current assets fill in the blank 42b831075fdaf85_14 Property, plant, and equipment: fill in the blank 42b831075fdaf85_16 fill in the blank 42b831075fdaf85_18 fill in the blank 42b831075fdaf85_19 Total assets $ fill in the blank 42b831075fdaf85_20 Liabilities Current liabilities: fill in the blank 42b831075fdaf85_22 Stockholders' Equity fill in the blank 42b831075fdaf85_24 fill in the blank 42b831075fdaf85_26 Total stockholders’ equity fill in the blank 42b831075fdaf85_27 Total liabilities and stockholders’ equity $ fill in the blank 42b831075fdaf85_28

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, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.: Cash $119,200 Accounts Receivable 227,700 Finished Goods 47,800 Work in Process 31,900 Materials 52,400 Prepaid Expenses 3,900 Plant and Equipment 609,100 Accumulated Depreciation—Plant and Equipment $261,900 Accounts Payable 206,700 Common Stock, $10 par 300,000 Retained Earnings 323,400 $1,092,000 $1,092,000 Factory output and sales for 20Y4 are expected to total 29,000 units of product, which are to be sold at $90 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 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 Direct labor _ 7 Factory overhead: Depreciation of plant and equipment $29,000 _ Other factory overhead 9,000 4 Selling expenses: Sales salaries and commissions 104,100 11.5 Advertising 87,000 _ Miscellaneous selling expense 7,500 2 Administrative expenses: Office and officers salaries 68,400 5.5 Supplies 3,500 1 Miscellaneous administrative expense 1,800 1.5 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 $207,100 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 30,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $164,000 cash in May. Required: 1. Prepare a budgeted income statement for 20Y4. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4 $fill in the blank 8d1341ff8fcd030_2 Cost of goods sold: $fill in the blank 8d1341ff8fcd030_4 fill in the blank 8d1341ff8fcd030_6 fill in the blank 8d1341ff8fcd030_8 Cost of goods sold fill in the blank 8d1341ff8fcd030_9 Gross profit $fill in the blank 8d1341ff8fcd030_10 Operating expenses: Selling expenses: $fill in the blank 8d1341ff8fcd030_12 fill in the blank 8d1341ff8fcd030_14 fill in the blank 8d1341ff8fcd030_16 Total selling expenses $fill in the blank 8d1341ff8fcd030_17 Administrative expenses: $fill in the blank 8d1341ff8fcd030_19 fill in the blank 8d1341ff8fcd030_21 fill in the blank 8d1341ff8fcd030_23 Total administrative expenses fill in the blank 8d1341ff8fcd030_24 Total operating expenses fill in the blank 8d1341ff8fcd030_25 Income before income tax $fill in the blank 8d1341ff8fcd030_26 fill in the blank 8d1341ff8fcd030_28 $fill in the blank 8d1341ff8fcd030_30 2. Prepare a budgeted balance sheet as of December 31, 20Y4. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4 Assets Current assets: fill in the blank 42b831075fdaf85_2 fill in the blank 42b831075fdaf85_4 Inventories: fill in the blank 42b831075fdaf85_6 fill in the blank 42b831075fdaf85_8 fill in the blank 42b831075fdaf85_10 fill in the blank 42b831075fdaf85_11 fill in the blank 42b831075fdaf85_13 Total current assets fill in the blank 42b831075fdaf85_14 Property, plant, and equipment: fill in the blank 42b831075fdaf85_16 fill in the blank 42b831075fdaf85_18 fill in the blank 42b831075fdaf85_19 Total assets $ fill in the blank 42b831075fdaf85_20 Liabilities Current liabilities: fill in the blank 42b831075fdaf85_22 Stockholders' Equity fill in the blank 42b831075fdaf85_24 fill in the blank 42b831075fdaf85_26 Total stockholders’ equity fill in the blank 42b831075fdaf85_27 Total liabilities and stockholders’ equity $ fill in the blank 42b831075fdaf85_28

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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Question

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, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.:

Cash	$119,200
Accounts Receivable	227,700
Finished Goods	47,800
Work in Process	31,900
Materials	52,400
Prepaid Expenses	3,900
Plant and Equipment	609,100
Accumulated Depreciation—Plant and Equipment		$261,900
Accounts Payable		206,700
Common Stock, $10 par		300,000
Retained Earnings		323,400
	$1,092,000	$1,092,000

Factory output and sales for 20Y4 are expected to total 29,000 units of product, which are to be sold at $90 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 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
Direct labor	_		7
Factory overhead:
Depreciation of plant and equipment	$29,000		_
Other factory overhead	9,000		4
Selling expenses:
Sales salaries and commissions	104,100		11.5
Advertising	87,000		_
Miscellaneous selling expense	7,500		2
Administrative expenses:
Office and officers salaries	68,400		5.5
Supplies	3,500		1
Miscellaneous administrative expense	1,800		1.5

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 $207,100 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 30,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $164,000 cash in May.

Required:

1. Prepare a budgeted income statement for 20Y4.

Regina Soap Co.
Budgeted Income Statement
For the Year Ending December 31, 20Y4
			$fill in the blank 8d1341ff8fcd030_2
Cost of goods sold:
		$fill in the blank 8d1341ff8fcd030_4
		fill in the blank 8d1341ff8fcd030_6
		fill in the blank 8d1341ff8fcd030_8
Cost of goods sold			fill in the blank 8d1341ff8fcd030_9
Gross profit			$fill in the blank 8d1341ff8fcd030_10
Operating expenses:
Selling expenses:
	$fill in the blank 8d1341ff8fcd030_12
	fill in the blank 8d1341ff8fcd030_14
	fill in the blank 8d1341ff8fcd030_16
Total selling expenses		$fill in the blank 8d1341ff8fcd030_17
Administrative expenses:
	$fill in the blank 8d1341ff8fcd030_19
	fill in the blank 8d1341ff8fcd030_21
	fill in the blank 8d1341ff8fcd030_23
Total administrative expenses		fill in the blank 8d1341ff8fcd030_24
Total operating expenses			fill in the blank 8d1341ff8fcd030_25
Income before income tax			$fill in the blank 8d1341ff8fcd030_26
			fill in the blank 8d1341ff8fcd030_28
			$fill in the blank 8d1341ff8fcd030_30

2. Prepare a budgeted balance sheet as of December 31, 20Y4.

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4
Assets
Current assets:
		fill in the blank 42b831075fdaf85_2
		fill in the blank 42b831075fdaf85_4
Inventories:
	fill in the blank 42b831075fdaf85_6
	fill in the blank 42b831075fdaf85_8
	fill in the blank 42b831075fdaf85_10	fill in the blank 42b831075fdaf85_11
		fill in the blank 42b831075fdaf85_13
Total current assets			fill in the blank 42b831075fdaf85_14
Property, plant, and equipment:
		fill in the blank 42b831075fdaf85_16
		fill in the blank 42b831075fdaf85_18	fill in the blank 42b831075fdaf85_19
Total assets			$ fill in the blank 42b831075fdaf85_20
Liabilities
Current liabilities:
			fill in the blank 42b831075fdaf85_22
Stockholders' Equity
		fill in the blank 42b831075fdaf85_24
		fill in the blank 42b831075fdaf85_26
Total stockholders’ equity			fill in the blank 42b831075fdaf85_27
Total liabilities and stockholders’ equity			$ fill in the blank 42b831075fdaf85_28

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