could you please put the steps to this question, thank you :) Budgeted Income St
ID: 2414823 • Letter: C
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could you please put the steps to this question, thank you :)
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.:
Factory output and sales for 20Y9 are expected to total 27,000 units of product, which are to be sold at $120 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:
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 $294,000 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 30,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $150,000 cash in May.
Cash $114,300 Accounts Receivable 218,300 Finished Goods 45,800 Work in Process 30,600 Materials 50,200 Prepaid Expenses 3,700 Plant and Equipment 554,400 Accumulated Depreciation—Plant and Equipment $238,400 Accounts Payable 186,800 Common Stock, $10 par 300,000 Retained Earnings 292,100 $1,017,300 $1,017,300 Required 1. Prepare a budgeted income statement for 20Y9 Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 20Y9 Sales Cost of goods sold Direct materials Direct labor Factory overhead Cost of goods sold Gross profit Operating expenses: Selling expenses Sales salaries and commissions Advertising Miscellaneous selling expense Total selling expenses Administrative expenses Office and officers salaries Supplies Miscellaneous administrative expense Total administrative expenses Total operating expenses Income before income tax Income tax expense Net incomeExplanation / Answer
Regina Soap Company Budgeted Income Statement For the Year Ended December 31st,20Y9 Units Sold $ 27,000.00 Sales(27000*$120)=(A) $ 32,40,000.00 Cost of goods sold Direct Material(27000*$30) $ 8,10,000.00 Direct Labor (27000*$9.5) $ 2,56,500.00 Factory Overhead($27000+$8400+27000*$5.5) $ 1,83,900.00 Cost of goods sold=(B) $ 12,50,400.00 Gross Profit=(C )=(A)-(B) $ 19,89,600.00 Operating Expenses Selling Expenses Sales salaries and commission($96900+27000*$15) $ 5,01,900.00 Advertising $ 81,000.00 Miscellaneous and selling expenses(7000+27000*$2.5) $ 74,500.00 Total Selling Expenses=(D) $ 6,57,400.00 Administerative Expenses Office and Office Salaries(63700+27000*$7.5) $ 2,66,200.00 Supplies($3200+27000*$1) $ 30,200.00 Miscellaneous Administerative expenses($1700+27000*$2) $ 55,700.00 Total Administerative Expenses=(E ) $ 3,52,100.00 Income before income tax=(F )=C )-(D)-(E ) $ 9,80,100.00 Income Tax=(G) $ 2,94,000.00 Net Income=(F)-(G) $ 6,86,100.00 Regine Soap Company Budgeted Balance Sheet Current Assets Cash $ 5,57,400.00 Accounts Receivable $ 2,18,300.00 Inventories Finished Goods $ 45,800.00 WIP $ 30,600.00 Materials $ 50,200.00 $ 1,26,600.00 Prepaid Expenses $ 3,700.00 Total Current Assets $ 9,06,000.00 Property,Plan and Equipment Plant and Equipment($554400+$150000) $ 7,04,400.00 Accumulated Depreciation($238400+$27000) $ 2,65,400.00 Total Property,Plant and Equipment $ 4,39,000.00 Total Assets $ 13,45,000.00 Liabiltites Current Liabilities Accounts Payables $ 1,86,800.00 Shareholder's Equity Common Stock $ 3,00,000.00 Retained Earnings($292100+$686100-$120000) $ 8,58,200.00 Total Stock holder's Equity $ 11,58,200.00 Total Liabilities and Stockholder's equity $ 13,45,000.00 Beginning Cash Balance $ 1,14,300.00 Add: Cash from Operation Net Income $ 6,86,100.00 Add: depreciation on Plant & Equipment $ 27,000.00 $ 7,13,100.00 Less: dividend Paid(30000*$1*4) $ -1,20,000.00 Less:Purchase of Plant & Equipment $ -1,50,000.00 $ -2,70,000.00 Cash Balance at year end $ 5,57,400.00
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