OBJ. 4, 5 PR 22-5A 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, 2017, the following tentative trial balance as of December 31, 2016, is prepared by the Accounting Department of Regina Soap Co.: Cash Accounts Receivable.. Finished Goods. Work in Process Materials Prepaid Expenses Plant and Equipment. Accumulated Depreciation-Plant and Equipment Accounts Payable ...... Common Stock, $10 par Retained Earnings. $688,900 Factory output and sales for 2017 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, 2017, are expected to remain unchanged from the balances at the beginning of the year. Cost of goods manufactured and sold: Direct materials.. Direct labor.... Factory overhead: Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows: Depreciation of plant and equipment.. Other factory overhead... Selling expenses: Sales salaries and commissions.. Advertising........ Miscellaneous selling expense $ 85,000 125,600 69,300 32,500 48,900 2,600 325,000 Administrative expenses: Office and officers salaries Supplies..... Miscellaneous administrative expense. $156,200 62,000 180,000 290,700 $688,900 Estimated costs and Expenses Fixed Variable (Total for Year) (Per Unit Sold) $40,000 12,000 46,000 64,000 6,000 72,400 5,000 4,000 $1.10 0.65 0.40 0.45 0.25 0.12 0.10 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 2017 taxable income will be paid during 2017. Regular quar- terly 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. Instructions 1. Prepare a budgeted income statement for 2017. 2. Prepare a budgeted balance sheet as of December 31, 2017, with supporting calculations.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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B
Question 1
X
fx PROBLEM 22-5A
с
Regina Soap Co..
Budgeted Income Statement
Cost of goods sold:
Direct materials
Direct labor
Factory overhead
Cost of goods sold
Gross profit
For the Year Ending December 31, 2021
Sales
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
D
E
F
G
Transcribed Image Text:B Question 1 X fx PROBLEM 22-5A с Regina Soap Co.. Budgeted Income Statement Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit For the Year Ending December 31, 2021 Sales 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 D E F G
PR 22-5A Budgeted income statement and balance sheet
OBJ. 4, 5
As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal
year beginning January 1, 2017, the following tentative trial balance as of December 31,
2016, is prepared by the Accounting Department of Regina Soap Co.:
Cash
Accounts Receivable...
Finished Goods
Work in Process
Materials...
Prepaid Expenses
Plant and Equipment
Accumulated Depreciation-Plant and Equipment
Accounts Payable.....
Common Stock, $10 par
Retained Earnings...
Cost of goods manufactured and sold:
Direct materials..
Direct labor...
Factory overhead:
Depreciation of plant and equipment..
Other factory overhead....
$688,900
Factory output and sales for 2017 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,
2017, are expected to remain unchanged from the balances at the beginning of the year.
Selling expenses:
Sales salaries and commissions...
Advertising........
Budget estimates of manufacturing costs and operating expenses for the year are
summarized as follows:
Miscellaneous selling expense
$ 85,000
125,600
Administrative expenses:
69,300
32,500
Office and officers salaries
Supplies.....
Miscellaneous administrative expense.
48,900
2,600
325,000
Estimated Costs and Expenses
Variable
(Per Unit Sold)
Fixed
(Total for Year)
$156,200
62,000
180,000
290,700
$688,900
$40,000
12,000
46,000
64,000
6,000
72,400
5,000
4,000
$1.10
0.65
0.40
0.45
0.25
0.12
0.10
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 2017 taxable income will be paid during 2017. Regular quar-
terly 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.
Instructions
1. Prepare a budgeted income statement for 2017.
2. Prepare a budgeted balance sheet as of December 31, 2017, with supporting calculations.
Transcribed Image Text:PR 22-5A Budgeted income statement and balance sheet OBJ. 4, 5 As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2017, the following tentative trial balance as of December 31, 2016, is prepared by the Accounting Department of Regina Soap Co.: Cash Accounts Receivable... Finished Goods Work in Process Materials... Prepaid Expenses Plant and Equipment Accumulated Depreciation-Plant and Equipment Accounts Payable..... Common Stock, $10 par Retained Earnings... Cost of goods manufactured and sold: Direct materials.. Direct labor... Factory overhead: Depreciation of plant and equipment.. Other factory overhead.... $688,900 Factory output and sales for 2017 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, 2017, are expected to remain unchanged from the balances at the beginning of the year. Selling expenses: Sales salaries and commissions... Advertising........ Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows: Miscellaneous selling expense $ 85,000 125,600 Administrative expenses: 69,300 32,500 Office and officers salaries Supplies..... Miscellaneous administrative expense. 48,900 2,600 325,000 Estimated Costs and Expenses Variable (Per Unit Sold) Fixed (Total for Year) $156,200 62,000 180,000 290,700 $688,900 $40,000 12,000 46,000 64,000 6,000 72,400 5,000 4,000 $1.10 0.65 0.40 0.45 0.25 0.12 0.10 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 2017 taxable income will be paid during 2017. Regular quar- terly 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. Instructions 1. Prepare a budgeted income statement for 2017. 2. Prepare a budgeted balance sheet as of December 31, 2017, with supporting calculations.
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