Reference no: EM13490422

The balance sheet of Phototec, Inc., a distributor of photographic supplies, as of May 31 is given below:

Phototec, Inc.
Balance Sheet
May 31
Assets
Cash $ 10,800
Accounts receivable 72,000
Inventory 36,000
Buildings and equipment, net of depreciation
601,200

Total assets $
720,000

Liabilities and Stockholders' Equity
Accounts payable $ 86,400
Note payable 15,840
Capital stock 531,360
Retained earnings
86,400

Total liabilities and stockholders' equity $
720,000

The company is in the process of preparing a budget for June and has assembled the following data:

a.  Sales are budgeted at $274,000 for June. Of these sales, $75,000 will be for cash; the remainder will be credit sales. One-half of a months credit sales are collected in the month the sales are made, and the remainder is collected the following month. All of the May 31 accounts receivable will be collected in June.

b.  Purchases of inventory are expected to total $199,000 during June. These purchases will all be on account. Fifty percent of all inventory purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.

c. The June 30 inventory balance is budgeted at $35,000.

d. Selling and administrative expenses for June are budgeted at $32,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,000 for the month.

e. The note payable on the May 31 balance sheet will be paid during June. The companys interest expense for June (on all borrowing) will be $700, which will be paid in cash.

f. New warehouse equipment costing $8,000 will be purchased for cash during June.

g. During June, the company will borrow $21,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

1b.Prepare a cash budget for June. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Omit the "tiny_mce_markerquot; sign in your response.)

2.Prepare a budgeted income statement for June. (Input all amounts as positive values. Omit the "tiny_mce_markerquot; sign in your response.)

3.Prepare a budgeted balance sheet as of June 30. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "tiny_mce_markerquot; sign in your response.)