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, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Regina Soap Co.: Cash $102,200     Accounts Receivable 173,700     Finished Goods 36,500     Work in Process 24,300     Materials 40,000     Prepaid Expenses 3,000     Plant and Equipment 470,100     Accumulated Depreciation—Plant and Equipment     $202,100 Accounts Payable     116,100 Common Stock, $10 par     350,000 Retained Earnings     181,600   $849,800   $849,800 Factory output and sales for 20Y9 are expected to total 23,000 units of product, which are to be sold at $90 per unit. The quantities and costs of the inventories at December 31, 20Y9, 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 $23,000   _     Other factory overhead 7,100   4   Selling expenses:     Sales salaries and commissions 82,600   11.5   Advertising 69,000   _   Miscellaneous selling expense 6,000   2   Administrative expenses:     Office and officers salaries 54,300   5.5   Supplies 2,800   1   Miscellaneous administrative expense 1,400   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 $164,200 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $127,000 cash in May. Required: 1.  Prepare a budgeted income statement for 20Y9. Regina Soap Co.Budgeted Income StatementFor the Year Ending December 31, 20Y9       $- Select - Cost of goods sold:           $- Select -       - Select -       - Select -   Cost of goods sold     fill in the blank b7db4b014fdb042_9 Gross profit     $fill in the blank b7db4b014fdb042_10 Operating expenses:       Selling expenses:         $- Select -       - Select -       - Select -     Total selling expenses   $fill in the blank b7db4b014fdb042_17   Administrative expenses:         $- Select -       - Select -       - Select -     Total administrative expenses   fill in the blank b7db4b014fdb042_24   Total operating expenses     fill in the blank b7db4b014fdb042_25 Income before income tax     $fill in the blank b7db4b014fdb042_26       - Select -       $- Select -   2.  Prepare a budgeted balance sheet as of December 31, 20Y9. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 Assets Current assets:           $fill in the blank 27473ef60045059_2       fill in the blank 27473ef60045059_4   Inventories:         $fill in the blank 27473ef60045059_6       fill in the blank 27473ef60045059_8       fill in the blank 27473ef60045059_10 fill in the blank 27473ef60045059_11       fill in the blank 27473ef60045059_13   Total current assets     $fill in the blank 27473ef60045059_14 Property, plant, and equipment:           $fill in the blank 27473ef60045059_16       fill in the blank 27473ef60045059_18   Total property, plant, and equipment     fill in the blank 27473ef60045059_19 Total assets     $fill in the blank 27473ef60045059_20 Liabilities Current liabilities:             $fill in the blank 27473ef60045059_22 Stockholders' Equity     $fill in the blank 27473ef60045059_24       fill in the blank 27473ef60045059_26   Total stockholders’ equity     fill in the blank 27473ef60045059_27 Total liabilities and stockholders’ equity     $fill in the blank 27473ef60045059_28

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
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, 20Y9, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Regina Soap Co.:

Cash $102,200    
Accounts Receivable 173,700    
Finished Goods 36,500    
Work in Process 24,300    
Materials 40,000    
Prepaid Expenses 3,000    
Plant and Equipment 470,100    
Accumulated Depreciation—Plant and Equipment     $202,100
Accounts Payable     116,100
Common Stock, $10 par     350,000
Retained Earnings     181,600
  $849,800   $849,800

Factory output and sales for 20Y9 are expected to total 23,000 units of product, which are to be sold at $90 per unit. The quantities and costs of the inventories at December 31, 20Y9, 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 $23,000   _  
  Other factory overhead 7,100   4  
Selling expenses:    
Sales salaries and commissions 82,600   11.5  
Advertising 69,000   _  
Miscellaneous selling expense 6,000   2  
Administrative expenses:    
Office and officers salaries 54,300   5.5  
Supplies 2,800   1  
Miscellaneous administrative expense 1,400   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 $164,200 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $127,000 cash in May.

Required:

1.  Prepare a budgeted income statement for 20Y9.

Regina Soap Co.Budgeted Income StatementFor the Year Ending December 31, 20Y9
 
    $- Select -
Cost of goods sold:      
 
  $- Select -  
 
  - Select -  
 
  - Select -  
Cost of goods sold     fill in the blank b7db4b014fdb042_9
Gross profit     $fill in the blank b7db4b014fdb042_10
Operating expenses:      
Selling expenses:      
 
$- Select -    
 
- Select -    
 
- Select -    
Total selling expenses   $fill in the blank b7db4b014fdb042_17  
Administrative expenses:      
 
$- Select -    
 
- Select -    
 
- Select -    
Total administrative expenses   fill in the blank b7db4b014fdb042_24  
Total operating expenses     fill in the blank b7db4b014fdb042_25
Income before income tax     $fill in the blank b7db4b014fdb042_26
 
    - Select -
 
    $- Select -
 

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

Regina Soap Co.
Budgeted Balance Sheet
December 31, 20Y9
Assets
Current assets:      
 
  $fill in the blank 27473ef60045059_2  
 
  fill in the blank 27473ef60045059_4  
Inventories:      
 
$fill in the blank 27473ef60045059_6    
 
fill in the blank 27473ef60045059_8    
 
fill in the blank 27473ef60045059_10 fill in the blank 27473ef60045059_11  
 
  fill in the blank 27473ef60045059_13  
Total current assets     $fill in the blank 27473ef60045059_14
Property, plant, and equipment:      
 
  $fill in the blank 27473ef60045059_16  
 
  fill in the blank 27473ef60045059_18  
Total property, plant, and equipment     fill in the blank 27473ef60045059_19
Total assets     $fill in the blank 27473ef60045059_20
Liabilities
Current liabilities:      
 
    $fill in the blank 27473ef60045059_22
Stockholders' Equity
 
  $fill in the blank 27473ef60045059_24  
 
  fill in the blank 27473ef60045059_26  
Total stockholders’ equity     fill in the blank 27473ef60045059_27
Total liabilities and stockholders’ equity     $fill in the blank 27473ef60045059_28
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Performance measurements
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education