Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 22, Problem 22.5BPR
As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y8, the following tentative
| Cash | $ 26,000 | |
| 23,800 | ||
| Finished Goods | 16,900 | |
| Work in Process | 4,200 | |
| Materials | 6,400 | |
| Prepaid Expenses | 600 | |
| Plant and Equipment | 82.000 | |
| $ 32,000 | ||
| Accounts Payable | 14.800 | |
| Common Stock. $1.50 par | 30,000 | |
| 83,100 | ||
| $159,900 | $159,900 |
Factory output and sales for 20Y8 are expected to total 3,800 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 20Y8, are expected to remain unchanged from the balances at the beginning of the year.
Budget estimates of
| Estimated Costs and Expenses | ||
| Fixed | Variable | |
| (Total for Year) | (Per Unit Sold) | |
| Cost of goods manufactured and sold: | ||
| Direct materials | — | $30.00 |
| Direct labor | — | B.40 |
| Factory |
||
| Depreciation of plant and equipment | $ 4,000 | — |
| Other factory overhead | 1,400 | 4.30 |
| Selling expenses: | ||
| Sales salaries and commissions | 12,800 | 13.50 |
| Advertising | 13,200 | — |
| Miscellaneous selling expense | 1,000 | 2.50 |
| Administrative expenses: | ||
| Office and officers salaries | 7,800 | 7.00 |
| Supplies | 500 | 1.20 |
| Miscellaneous administrative expense | 400 | 2.40 |
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 $35,000 on 20Y8 taxable income will be paid during 20Y8. Regular quarterly cash dividends of $0.20 per share are expected to be declared and paid in March, June, September, and December on 20,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $22,000 cash in May.
Instructions
- 1. Prepare a budgeted income statement for 20Y8.
- 2. Prepare a budgeted balance sheet as of December 31,20Y8, with supporting calculations.
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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…
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
$117,800
Accounts Receivable
208,500
Finished Goods
43,800
Work in Process
29,200
Materials
48,000
Prepaid Expenses
3,500
Plant and Equipment
548,900
Accumulated Depreciation—Plant and Equipment
$236,000
Accounts Payable
200,300
Common Stock, $10 par
250,000
Retained Earnings
313,400
$999,700
$999,700
Factory output and sales for 20Y9 are expected to total 27,000 units of product, which are to be sold at $100 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…
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
$109,300
Accounts Receivable
201,100
Finished Goods
42,200
Work in Process
28,200
Materials
46,300
Prepaid Expenses
3,400
Plant and Equipment
524,600
Accumulated Depreciation—Plant and Equipment
$225,600
Accounts Payable
167,500
Common Stock, $10 par
300,000
Retained Earnings
262,000
$955,100
$955,100
Factory output and sales for 20Y9 are expected to total 26,000 units of product, which are to be sold at $110 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…
Chapter 22 Solutions
Accounting
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