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, 2019, the following tentative trial balance as of December 31, 2048, 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 85,000 125,600 69,300 32,500 48,900 2,600 325,000 $156,200 62.000 180,000 290,700 $688,900 $688,900 Factory output and sales for 2019 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 2049 are yested to remain unchanged from the balances at the beginning of the year.

Answer 1

Prepare budgeted income statement for the year 20x9 as follows: A B C. RS Company Budgeted Income Statement 1 For the year ended December 31, 2019 Amount Amount S1,000,000 4 5 Sales (2000,000x$5.00) 6 Less: Direct Materials (2000,000 $1.10) Direct Labor (200,000 $0.65) Factory overhead [S40,000+S12,000+(200,000 S0.40)] 10 Cost of goods sold 11 Gross Profit [Sales-Cost of goods sold] 12 Less: Operating Expenses: Selling Expenses: Sales salaries and commissions [ $46,000+ (200,000xS0.45)] Advertising Miscellaneous selling Expense [ $6,000+(200,000 S0.25) $220,000 $130,000 $132,000 7 8 $482,000 $518,000 13 s136,000 $64,000 $56,000 14 15 16 17 Total selling Expenses S256,000 Adminstrative expenses Office and officers salaries [$72,400+(200,000 S0.12)] Supplies[$5,000+(200,000 $0.10)] Miscellaneous Adminstrative Expenses [S4,000+ (200,000 S0.05)] 18 $96,400 S25,000 $14,000 19 20 21 22 Total Admistrative expenses 23 Total Operating Expenses 24 Income Before Tax 25 Less: Income Tax 26 Net Operating Income $135,400 $391,400 $126,600 S30,000 $96.600

Prepare Budgeted balance sheet as of December 31, 20x9 as follows: A C RS Company Budgeted Balance Sheet 1 2 For the year ended December 31,2019 Amount Amount 4 Assets 5 Current assets: Cash ($85,000+S96,600+S40,000-$10,800-$75,000) Accounts Receivable $135,800 6 $125,600 7 Inventories 8 Finished Goods $69,300 S32,500 Work In Process Materials Prepaid Expenses 10 S150,700 S2,600 $414,700 S48,900 11 12 13 Total Current Assets Property, Plant and Equipment Plant and Equipment ($325,000+S75,000) Less: Accumulated Depreciation ($156,200+S40,000) 14 $400,000 15 s196,200 S203,800 $618.500 16 17 Total Assets 18 19 Current liabilities $62,000 Accounts Payable 20 21 Stockholder's Equity Common stock Retained earnings [$290,700+S 96,600- $10,800] $180,000 $376,500 22 23 24 Total stockholders' equity 25 Total Liabilities and Stockholders' Equity $556,500 $618.500