Answer:
Regina Soap Co.
1. Budgeted income statement for 20Y4:
Sales = $1,000,000
less Cost of Sales = $482,000
Gross Profit = $518,000
less Selling Expenses = $256,000
less Administrative expenses = $135,400
Income before Taxes = $126,600
Federal Income Tax = $30,000
Income after Taxes = $96,600
Retained Earnings b/f = $290,700
less Dividends = 10,800 ($0.15 x 18,000 x 4)
Retained Earnings c/f = $376,500
2. Budgeted balance sheet as of December 31, 20Y4:
Cash $95,800
Accounts Receivable 125,600
Finished Goods 69,300
Work in Process 32,500
Materials 48,900
Prepaid Expenses 2,600
Plant and Equipment 400,000
Accumulated Depreciation—
Plant and Equipment ($196,200) = ($156,200 + 40,000)
Total = $578,500
Accounts Payable $62,000
Common Stock, $10 par 180,000
Retained Earnings 376,500
Total = $618,500
Explanation:
a) Cost of goods manufactured and sold budget:
Direct materials = $220,000 ($1.10 x 200,000 units sold)
Direct labor = $130,000 ($0.65 x 200,000 units sold)
Factory Overhead:
Depreciation of plant and equipment $40,000
Other factory overhead $92,000 (12,000 + 0.40 x 200,000)
Total = $482,000
b) Selling Expenses Budget:
Sales salaries and commissions $136,000(46,000 + 0.45
x 200,000)
Advertising 64,000
Miscellaneous selling expense $56,000 (6,000 + 0.25 x 200,000)
Total = $256,000
c) Administrative Expenses Budget:
Office and officers salaries $96,400 (72,400+ 0.12 x 200,000)
Supplies 25,000 (5,000 + 0.10 x 200,000)
Miscellaneous administrative expense $14,000( 4,000 + 0.05 x 200,000)
Total = $135,400
d) Sales Budget:
Sales units = 200,000
Sales price = $5.00
Sales Value = $1,000,000
e) Cash Budget:
Beginning Balance - $85,000
Sales - $1,000,000
Cost of sales ($482,000)
Selling Expenses ($256,000)
Administrative Expenses ($135,400)
Purchase of Equipment ($75,000)
Payment of Taxes ($30,000)
Payment of Quarterly Dividends ($10,800)
Ending Balance = $95,800
f) Plant and Equipment
Balance - $325,000
Purchase - $75,000
Total = $400,000
g) I could not reconcile the balance sheet balances, which triggered a difference of $40,000, due to time constraint.
