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 $ 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 $688,900 $688,900 Factory 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 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 _ $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 0.12 Supplies 5,000 0.10 Miscellaneous administrative expense 4,000 0.05 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 $30,000 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $0.15 per 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 20Y4. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4 Sales $fill in the blank 83a36600b007f7f_2 Cost of goods sold: Direct materials $fill in the blank 83a36600b007f7f_4 Direct labor fill in the blank 83a36600b007f7f_6 Factory overhead fill in the blank 83a36600b007f7f_8 Cost of goods sold fill in the blank 83a36600b007f7f_9 Gross profit $fill in the blank 83a36600b007f7f_10 Operating expenses: Selling expenses: Sales salaries and commissions $fill in the blank 83a36600b007f7f_12 Advertising fill in the blank 83a36600b007f7f_14 Miscellaneous selling expense fill in the blank 83a36600b007f7f_16 Total selling expenses $fill in the blank 83a36600b007f7f_17 Administrative expenses: Office and officers salaries $fill in the blank 83a36600b007f7f_19 Supplies fill in the blank 83a36600b007f7f_21 Miscellaneous administrative expense fill in the blank 83a36600b007f7f_23 Total administrative expenses fill in the blank 83a36600b007f7f_24 Total operating expenses fill in the blank 83a36600b007f7f_25 Income before income tax $fill in the blank 83a36600b007f7f_26 Income tax expense fill in the blank 83a36600b007f7f_28 Net income $fill in the blank 83a36600b007f7f_30 Feedback 2. Prepare a budgeted balance sheet as of December 31, 20Y4. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4 Assets Current assets: Cash fill in the blank 9b271ef9b034040_2 Accounts receivable fill in the blank 9b271ef9b034040_4 Inventories: Finished goods fill in the blank 9b271ef9b034040_6 Work in process fill in the blank 9b271ef9b034040_8 Materials fill in the blank 9b271ef9b034040_10 fill in the blank 9b271ef9b034040_11 Prepaid expenses fill in the blank 9b271ef9b034040_13 Total current assets fill in the blank 9b271ef9b034040_14 Property, plant, and equipment: Plant and equipment fill in the blank 9b271ef9b034040_16 Less accumulated depreciation fill in the blank 9b271ef9b034040_18 fill in the blank 9b271ef9b034040_19 Total assets $ fill in the blank 9b271ef9b034040_20 Liabilities Current liabilities: Accounts payable fill in the blank 9b271ef9b034040_22 Stockholders' Equity Common stock fill in the blank 9b271ef9b034040_24 Retained earnings fill in the blank 9b271ef9b034040_26 Total stockholders’ equity fill in the blank 9b271ef9b034040_27 Total liabilities and stockholders’ equity $ fill in the blank 9b271ef9b034040_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 $ 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 $688,900 $688,900 Factory 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 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 _ $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 0.12 Supplies 5,000 0.10 Miscellaneous administrative expense 4,000 0.05 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 $30,000 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $0.15 per 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 20Y4. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y4 Sales $fill in the blank 83a36600b007f7f_2 Cost of goods sold: Direct materials $fill in the blank 83a36600b007f7f_4 Direct labor fill in the blank 83a36600b007f7f_6 Factory overhead fill in the blank 83a36600b007f7f_8 Cost of goods sold fill in the blank 83a36600b007f7f_9 Gross profit $fill in the blank 83a36600b007f7f_10 Operating expenses: Selling expenses: Sales salaries and commissions $fill in the blank 83a36600b007f7f_12 Advertising fill in the blank 83a36600b007f7f_14 Miscellaneous selling expense fill in the blank 83a36600b007f7f_16 Total selling expenses $fill in the blank 83a36600b007f7f_17 Administrative expenses: Office and officers salaries $fill in the blank 83a36600b007f7f_19 Supplies fill in the blank 83a36600b007f7f_21 Miscellaneous administrative expense fill in the blank 83a36600b007f7f_23 Total administrative expenses fill in the blank 83a36600b007f7f_24 Total operating expenses fill in the blank 83a36600b007f7f_25 Income before income tax $fill in the blank 83a36600b007f7f_26 Income tax expense fill in the blank 83a36600b007f7f_28 Net income $fill in the blank 83a36600b007f7f_30 Feedback 2. Prepare a budgeted balance sheet as of December 31, 20Y4. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4 Assets Current assets: Cash fill in the blank 9b271ef9b034040_2 Accounts receivable fill in the blank 9b271ef9b034040_4 Inventories: Finished goods fill in the blank 9b271ef9b034040_6 Work in process fill in the blank 9b271ef9b034040_8 Materials fill in the blank 9b271ef9b034040_10 fill in the blank 9b271ef9b034040_11 Prepaid expenses fill in the blank 9b271ef9b034040_13 Total current assets fill in the blank 9b271ef9b034040_14 Property, plant, and equipment: Plant and equipment fill in the blank 9b271ef9b034040_16 Less accumulated depreciation fill in the blank 9b271ef9b034040_18 fill in the blank 9b271ef9b034040_19 Total assets $ fill in the blank 9b271ef9b034040_20 Liabilities Current liabilities: Accounts payable fill in the blank 9b271ef9b034040_22 Stockholders' Equity Common stock fill in the blank 9b271ef9b034040_24 Retained earnings fill in the blank 9b271ef9b034040_26 Total stockholders’ equity fill in the blank 9b271ef9b034040_27 Total liabilities and stockholders’ equity $ fill in the blank 9b271ef9b034040_28

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

100%

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	$ 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
	$688,900	$688,900

Factory 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 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	_		$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		0.12
Supplies	5,000		0.10
Miscellaneous administrative expense	4,000		0.05

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 $30,000 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $0.15 per 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 20Y4.

Regina Soap Co.
Budgeted Income Statement
For the Year Ending December 31, 20Y4
Sales			$fill in the blank 83a36600b007f7f_2
Cost of goods sold:
Direct materials		$fill in the blank 83a36600b007f7f_4
Direct labor		fill in the blank 83a36600b007f7f_6
Factory overhead		fill in the blank 83a36600b007f7f_8
Cost of goods sold			fill in the blank 83a36600b007f7f_9
Gross profit			$fill in the blank 83a36600b007f7f_10
Operating expenses:
Selling expenses:
Sales salaries and commissions	$fill in the blank 83a36600b007f7f_12
Advertising	fill in the blank 83a36600b007f7f_14
Miscellaneous selling expense	fill in the blank 83a36600b007f7f_16
Total selling expenses		$fill in the blank 83a36600b007f7f_17
Administrative expenses:
Office and officers salaries	$fill in the blank 83a36600b007f7f_19
Supplies	fill in the blank 83a36600b007f7f_21
Miscellaneous administrative expense	fill in the blank 83a36600b007f7f_23
Total administrative expenses		fill in the blank 83a36600b007f7f_24
Total operating expenses			fill in the blank 83a36600b007f7f_25
Income before income tax			$fill in the blank 83a36600b007f7f_26
Income tax expense			fill in the blank 83a36600b007f7f_28
Net income			$fill in the blank 83a36600b007f7f_30

Feedback

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

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y4
Assets
Current assets:
Cash		fill in the blank 9b271ef9b034040_2
Accounts receivable		fill in the blank 9b271ef9b034040_4
Inventories:
Finished goods	fill in the blank 9b271ef9b034040_6
Work in process	fill in the blank 9b271ef9b034040_8
Materials	fill in the blank 9b271ef9b034040_10	fill in the blank 9b271ef9b034040_11
Prepaid expenses		fill in the blank 9b271ef9b034040_13
Total current assets			fill in the blank 9b271ef9b034040_14
Property, plant, and equipment:
Plant and equipment		fill in the blank 9b271ef9b034040_16
Less accumulated depreciation		fill in the blank 9b271ef9b034040_18	fill in the blank 9b271ef9b034040_19
Total assets			$ fill in the blank 9b271ef9b034040_20
Liabilities
Current liabilities:
Accounts payable			fill in the blank 9b271ef9b034040_22
Stockholders' Equity
Common stock		fill in the blank 9b271ef9b034040_24
Retained earnings		fill in the blank 9b271ef9b034040_26
Total stockholders’ equity			fill in the blank 9b271ef9b034040_27
Total liabilities and stockholders’ equity			$ fill in the blank 9b271ef9b034040_28

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.