PR 22-5A Budgeted income statement and balance sheet OBJ. 4,5 As a preliminary to requesting budget...

  

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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.. $ 85,000 Accounts Receivable. 125.600 Finished Goods 69,300 Work in Process. 32,500 Materials 48,900 Prepaid Expenses 2,600 Plant and Equipment 325,000 Accumulated Depreciation-Plant and Equipment... $156,200 62,000 Accounts Payable. Common Stock, $10 par 180,000 Retained Earnings 290,700 $688,900 $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. Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows: Estimated Costs and Expenses Fixed Variable (Total for Year) (PerUnit Sold) Cost of goods manufactured and sold: Direct materials. $1.10 Direct labor 0.65 Factory overhead: Depreciation of plant and equipment. $40,000 Other factory overhead. 12,000 0.40 Selling expenses: 46,000 0.45 Sales salaries and commissions. Advertising.. 64,000 Miscellaneous selling expense 6,000 0.25 72,400 0.12 Office and officers salaries. Supplies.. 5,000 0.10 4,000 0.05 Miscellaneous administrative expense. 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. Administrative expenses: REGINA SOAP CO. Budgeted Balance Sheet December 31, 2017 ASSETS Current assets: Cash Accounts receivable Inventories: Finished goods Work in process Materials Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment Less accumulated depreciation Total assets LIABILITIES Current liabilities: Accounts payable STOCKHOLDERS' EQUITY Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 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.. $ 85,000 Accounts Receivable. 125.600 Finished Goods 69,300 Work in Process. 32,500 Materials 48,900 Prepaid Expenses 2,600 Plant and Equipment 325,000 Accumulated Depreciation-Plant and Equipment... $156,200 62,000 Accounts Payable. Common Stock, $10 par 180,000 Retained Earnings 290,700 $688,900 $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. Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows: Estimated Costs and Expenses Fixed Variable (Total for Year) (PerUnit Sold) Cost of goods manufactured and sold: Direct materials. $1.10 Direct labor 0.65 Factory overhead: Depreciation of plant and equipment. $40,000 Other factory overhead. 12,000 0.40 Selling expenses: 46,000 0.45 Sales salaries and commissions. Advertising.. 64,000 Miscellaneous selling expense 6,000 0.25 72,400 0.12 Office and officers salaries. Supplies.. 5,000 0.10 4,000 0.05 Miscellaneous administrative expense. 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. Administrative expenses: REGINA SOAP CO. Budgeted Balance Sheet December 31, 2017 ASSETS Current assets: Cash Accounts receivable Inventories: Finished goods Work in process Materials Prepaid expenses Total current assets Property, plant, and equipment: Plant and equipment Less accumulated depreciation Total assets LIABILITIES Current liabilities: Accounts payable STOCKHOLDERS' EQUITY Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity

Answer rating: 100% (QA)

Regina Soap Co Budgeted Income Statement For the Year Ending December 31 2017 Details Fixed Variable ... View the full answer