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 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 _ $25 Direct labor _ 8 Factory overhead: Depreciation of plant and equipment $27,000 _ Other factory overhead 8,400 4.5 Selling expenses: Sales salaries and commissions 96,900 12.5 Advertising 81,000 _ Miscellaneous selling expense 7,000 2 Administrative expenses: Office and officers salaries 63,700 6.5 Supplies 3,200 1 Miscellaneous administrative expense 1,700 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 $229,200 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 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $148,000 cash in May. Required: 1. Prepare a budgeted income statement for 20Y9. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9 Sales $fill in the blank a8039006d02cfe8_2 Cost of goods sold: Direct materials $fill in the blank a8039006d02cfe8_4 Direct labor fill in the blank a8039006d02cfe8_6 Factory overhead fill in the blank a8039006d02cfe8_8 Cost of goods sold fill in the blank a8039006d02cfe8_9 Gross profit $fill in the blank a8039006d02cfe8_10 Operating expenses: Selling expenses: Sales salaries and commissions $fill in the blank a8039006d02cfe8_12 Advertising fill in the blank a8039006d02cfe8_14 Miscellaneous selling expense fill in the blank a8039006d02cfe8_16 Total selling expenses $fill in the blank a8039006d02cfe8_17 Administrative expenses: Office and officers salaries $fill in the blank a8039006d02cfe8_19 Supplies fill in the blank a8039006d02cfe8_21 Miscellaneous administrative expense fill in the blank a8039006d02cfe8_23 Total administrative expenses fill in the blank a8039006d02cfe8_24 Total operating expenses fill in the blank a8039006d02cfe8_25 Income before income tax $fill in the blank a8039006d02cfe8_26 Income tax expense fill in the blank a8039006d02cfe8_28 Net income $fill in the blank a8039006d02cfe8_30 Feedback Use information from the expected sales, cost of goods manufactured and sold, and selling and administrative expenses. 2. Prepare a budgeted balance sheet as of December 31, 20Y9. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 Assets Current assets: Cash $fill in the blank ce0bc1017faffc1_2 Accounts receivable fill in the blank ce0bc1017faffc1_4 Inventories: Finished goods $fill in the blank ce0bc1017faffc1_6 Work in process fill in the blank ce0bc1017faffc1_8 Materials fill in the blank ce0bc1017faffc1_10 fill in the blank ce0bc1017faffc1_11 Prepaid expenses fill in the blank ce0bc1017faffc1_13 Total current assets $fill in the blank ce0bc1017faffc1_14 Property, plant, and equipment: Plant and equipment $fill in the blank ce0bc1017faffc1_16 Accumulated depreciation fill in the blank ce0bc1017faffc1_18 Total property, plant, and equipment fill in the blank ce0bc1017faffc1_19 Total assets $fill in the blank ce0bc1017faffc1_20 Liabilities Current liabilities: Accounts payable $fill in the blank ce0bc1017faffc1_22 Stockholders' Equity Common stock $fill in the blank ce0bc1017faffc1_24 Retained earnings fill in the blank ce0bc1017faffc1_26 Total stockholders’ equity fill in the blank ce0bc1017faffc1_27 Total liabilities and stockholders’ equity $fill in the blank ce0bc1017faffc1_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, 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 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 _ $25 Direct labor _ 8 Factory overhead: Depreciation of plant and equipment $27,000 _ Other factory overhead 8,400 4.5 Selling expenses: Sales salaries and commissions 96,900 12.5 Advertising 81,000 _ Miscellaneous selling expense 7,000 2 Administrative expenses: Office and officers salaries 63,700 6.5 Supplies 3,200 1 Miscellaneous administrative expense 1,700 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 $229,200 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 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $148,000 cash in May. Required: 1. Prepare a budgeted income statement for 20Y9. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9 Sales $fill in the blank a8039006d02cfe8_2 Cost of goods sold: Direct materials $fill in the blank a8039006d02cfe8_4 Direct labor fill in the blank a8039006d02cfe8_6 Factory overhead fill in the blank a8039006d02cfe8_8 Cost of goods sold fill in the blank a8039006d02cfe8_9 Gross profit $fill in the blank a8039006d02cfe8_10 Operating expenses: Selling expenses: Sales salaries and commissions $fill in the blank a8039006d02cfe8_12 Advertising fill in the blank a8039006d02cfe8_14 Miscellaneous selling expense fill in the blank a8039006d02cfe8_16 Total selling expenses $fill in the blank a8039006d02cfe8_17 Administrative expenses: Office and officers salaries $fill in the blank a8039006d02cfe8_19 Supplies fill in the blank a8039006d02cfe8_21 Miscellaneous administrative expense fill in the blank a8039006d02cfe8_23 Total administrative expenses fill in the blank a8039006d02cfe8_24 Total operating expenses fill in the blank a8039006d02cfe8_25 Income before income tax $fill in the blank a8039006d02cfe8_26 Income tax expense fill in the blank a8039006d02cfe8_28 Net income $fill in the blank a8039006d02cfe8_30 Feedback Use information from the expected sales, cost of goods manufactured and sold, and selling and administrative expenses. 2. Prepare a budgeted balance sheet as of December 31, 20Y9. Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 Assets Current assets: Cash $fill in the blank ce0bc1017faffc1_2 Accounts receivable fill in the blank ce0bc1017faffc1_4 Inventories: Finished goods $fill in the blank ce0bc1017faffc1_6 Work in process fill in the blank ce0bc1017faffc1_8 Materials fill in the blank ce0bc1017faffc1_10 fill in the blank ce0bc1017faffc1_11 Prepaid expenses fill in the blank ce0bc1017faffc1_13 Total current assets $fill in the blank ce0bc1017faffc1_14 Property, plant, and equipment: Plant and equipment $fill in the blank ce0bc1017faffc1_16 Accumulated depreciation fill in the blank ce0bc1017faffc1_18 Total property, plant, and equipment fill in the blank ce0bc1017faffc1_19 Total assets $fill in the blank ce0bc1017faffc1_20 Liabilities Current liabilities: Accounts payable $fill in the blank ce0bc1017faffc1_22 Stockholders' Equity Common stock $fill in the blank ce0bc1017faffc1_24 Retained earnings fill in the blank ce0bc1017faffc1_26 Total stockholders’ equity fill in the blank ce0bc1017faffc1_27 Total liabilities and stockholders’ equity $fill in the blank ce0bc1017faffc1_28

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 6PA: Budgeted income statement and balance sheet As a preliminary to requesting budget estimates of...

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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, 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 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	_		$25
Direct labor	_		8
Factory overhead:
Depreciation of plant and equipment	$27,000		_
Other factory overhead	8,400		4.5
Selling expenses:
Sales salaries and commissions	96,900		12.5
Advertising	81,000		_
Miscellaneous selling expense	7,000		2
Administrative expenses:
Office and officers salaries	63,700		6.5
Supplies	3,200		1
Miscellaneous administrative expense	1,700		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 $229,200 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 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $148,000 cash in May.

Required:

1. Prepare a budgeted income statement for 20Y9.

Regina Soap Co.
Budgeted Income Statement
For the Year Ending December 31, 20Y9
Sales			$fill in the blank a8039006d02cfe8_2
Cost of goods sold:
Direct materials		$fill in the blank a8039006d02cfe8_4
Direct labor		fill in the blank a8039006d02cfe8_6
Factory overhead		fill in the blank a8039006d02cfe8_8
Cost of goods sold			fill in the blank a8039006d02cfe8_9
Gross profit			$fill in the blank a8039006d02cfe8_10
Operating expenses:
Selling expenses:
Sales salaries and commissions	$fill in the blank a8039006d02cfe8_12
Advertising	fill in the blank a8039006d02cfe8_14
Miscellaneous selling expense	fill in the blank a8039006d02cfe8_16
Total selling expenses		$fill in the blank a8039006d02cfe8_17
Administrative expenses:
Office and officers salaries	$fill in the blank a8039006d02cfe8_19
Supplies	fill in the blank a8039006d02cfe8_21
Miscellaneous administrative expense	fill in the blank a8039006d02cfe8_23
Total administrative expenses		fill in the blank a8039006d02cfe8_24
Total operating expenses			fill in the blank a8039006d02cfe8_25
Income before income tax			$fill in the blank a8039006d02cfe8_26
Income tax expense			fill in the blank a8039006d02cfe8_28
Net income			$fill in the blank a8039006d02cfe8_30

Feedback

Use information from the expected sales, cost of goods manufactured and sold, and selling and administrative expenses.

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

Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9
Assets
Current assets:
Cash		$fill in the blank ce0bc1017faffc1_2
Accounts receivable		fill in the blank ce0bc1017faffc1_4
Inventories:
Finished goods	$fill in the blank ce0bc1017faffc1_6
Work in process	fill in the blank ce0bc1017faffc1_8
Materials	fill in the blank ce0bc1017faffc1_10	fill in the blank ce0bc1017faffc1_11
Prepaid expenses		fill in the blank ce0bc1017faffc1_13
Total current assets			$fill in the blank ce0bc1017faffc1_14
Property, plant, and equipment:
Plant and equipment		$fill in the blank ce0bc1017faffc1_16
Accumulated depreciation		fill in the blank ce0bc1017faffc1_18
Total property, plant, and equipment			fill in the blank ce0bc1017faffc1_19
Total assets			$fill in the blank ce0bc1017faffc1_20
Liabilities
Current liabilities:
Accounts payable			$fill in the blank ce0bc1017faffc1_22
Stockholders' Equity
Common stock		$fill in the blank ce0bc1017faffc1_24
Retained earnings		fill in the blank ce0bc1017faffc1_26
Total stockholders’ equity			fill in the blank ce0bc1017faffc1_27
Total liabilities and stockholders’ equity			$fill in the blank ce0bc1017faffc1_28

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