Budgeted Income Statement and Balance Sheet As a preliminary to requesting budget estimates of sales, costs,...

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Budgeted Income Statement and Balance Sheet As a preliminary to requesting budget estimates of sales, costs, and expenses for

actory output and sales for 2049 are expected to total 27,000 units of product, which are to be old at $120 per unit. The qua

1. Prepare a budgeted income statement for 2049. Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2

Prepare a budgeted balance sheet as of December 31, 2049. Regina Soap Co. Budgeted Balance Sheet December 31, 2049 Assets Cur

business accounting

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Answer 1

Answer #1

Answer -

1. Answer -

Regina Soap Co.
Budgeted Income Statement
For the Year Ending December 31, 20Y9
Sales			$3240000
Cost of goods sold:
Direct materials		$810000
Direct labor		$256500
Factory overhead		$183900
Cost of goods sold:			$1250400
Gross profit			$1989600
Operation expenses:
Selling expenses:
Sales salaries and commissions	$501900
Advertising	$81000
Miscellaneous selling expense	$74500
Total selling expenses		$657400
Administrative expenses:
Office and officers salaries	$266200
Supplies	$30200
Miscellaneous administrative expense	$55700
Total administrative expenses		$352100
Total operating expenses			$1009500
Income before income tax			$980100
Income tax expense			$294000
Net income			$686100

Calculation:

1. Sales:

= Production in units * Selling price per unit

= 27000 units * $120 per unit

= $3240000

2. Direct materials:

= No. of units sold * Direct materials per unit sold

= 27000 units * $30 per unit sold

= $810000

3. Direct labor:

= No. of units sold * Direct labor per unit sold

= 27000 units * $9.5 per unit sold

= $256500

4. Factory overhead:

Other factory overhead:

= Fixed cost + (No. of units sold * Other factory overhead per unit sold)

= $8400 + (27000 units * $5.5 per unit sold)

= $156900

Therefore,

Factory overhead = Depreciation of plant and equipment + Other factory overhead

= $27000 + $156900

= $183900

5. Cost of goods sold:

= Direct materials + Direct labor + Factory overhead

= $810000 + $256500 + $183900

= $1250400

6. Gross profit:

= Sales - Cost of goods sold

= $3240000 - $1250400

= $1989600

7. Selling expenses:

a. Sales salaries and commissions:

= Fixed cost + (No. of units sold * Sales salaries and commissions per unit sold)

= $96900 + (27000 units * $15 per unit sold)

= $501900

b. Miscellaneous selling expense:

= Fixed cost + (No. of units sold * Miscellaneous selling expense per unit sold)

= $7000 + (27000 units * $2.5 per unit sold)

= $74500

Therefore,

Selling expenses = Sales salaries and commissions + Advertising + Miscellaneous selling expense

= $501900 + $81000 + $74500

= $657400

8. Administrative expenses:

a. Office and officers’ salaries:

= Fixed cost + (No. of units sold * Office and officers’ salaries per unit sold)

= $63700 + (27000 units * $7.5 per unit sold)

= $266200

b. Supplies:

= Fixed cost + (No. of units sold * Supplies per unit sold)

= $3200 + (27000 units * $1 per unit sold)

= $30200

c. Miscellaneous administrative expense:

= Fixed cost + (No. of units sold * Miscellaneous administrative expense per unit sold)

= $1700 + (27000 units * $2 per unit sold)

= $55700

Therefore,

Administrative expenses = Office and officers’ salaries + Supplies + Miscellaneous administrative expense

= $266200 + $30200 + $55700

= $352100

9. Total operating expenses:

= Selling expenses + Administrative expenses

= $657400 + $352100

= $1009500

10. Income before income tax:

= Gross profit - Total operating expenses

= $1989600 - $1009500

= $980100

12. Net income:

= Income before income tax - Income tax

= $980100 - $294000

= $686100

2. Answer -

Regina Soap Co.
Budgeted balance Sheet
December 31, 20Y9
Assets:
Current assets:
Cash		$576600
Accounts receivable		$205600
Inventories:
Finished goods	$43200
Work in process	$28800
Raw materials	$47300	$119300
Prepaid expenses		$3500
Total current assets			$905000
Property, plant, and equipment:
Plant and equipment		$725100
Accumulated depreciation		$272600	$452500
Total assets			$1357500

Liabilities:
Current liabilities:
Accounts payable			$203300

Stockholders equity:
Common stock		$250000
Retained earnings		$904200
Total stockholders equity			$1154200
Total liabilities and stockholders equity			$1357500

Calculation:

1. Inventories:

= Finished goods + Work in process + Raw materials

= $43200 + $28800 + $47300

= $119300

2. Property, plant and equipment:

a. Plant and equipment:

= Beginning balance + Newly purchase in May

= $571100 + $154000

= $725100

b. Accumulated depreciation:

= Beginning balance + Depreciation expense

= $245600 + $27000

= $272600

Therefore,

Property, plant and equipment = Plant and equipment - Accumulated depreciation

= $725100 - $272600

= $452500

3. Retained earnings:

Dividend paid:

$1 per share dividend paid in March, June, September and December on 25000 shares of common stock outstanding.

= 25000 share * $1 * 4 times (quarterly paid)

= $100000

Therefore,

Retained earnings = Beginning balance + Net income - Dividend paid

= $318100 + $686100 - $100000

= $904200

4. Total Stockholders equity:

= Common stock + Retained earnings

= $250000 + $904200

= $1154200

5. Total liabilities and stockholders equity:

= Liabilities + Total Stockholders equity

= $203300 + $1154200

= $1357500

6. Cash:

As we know,

Total assets = Total liabilities and stockholders equity

So,

Total liabilities and stockholders equity = Cash + Accounts receivable + Inventories + Prepaid expenses + Property, plant and equipment

Cash = Total liabilities and stockholders equity - (Accounts receivable + Inventories + Prepaid expenses + Property, plant and equipment)

Cash = $1357500 - (205600 + $119300 + $3500 + $452500)

Cash = $576600

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