EBZ Fashion is preparing a quarterly budget covering the 3 months ending 30 September 2017. The information available for the budget is as follows:

1. Cash sales represent 80% of all monthly sales; credit sales are collected in the month after sale.

2. Inventory purchases that are made on account equal 60% of the sales forecast for that month; 30% of the purchases are paid for in the month of purchase, and 70% are paid for in the following month.

3. Ending inventory on 30 September 2017 is projected to be $57800.

4. Equipment purchases at the end of September are budgeted at $95000.

5. Other quarterly expenses are budgeted as follows: administration expenses, $14700; utilities $55000; salaries, $154000; stationery $4800. These expenses are paid when incurred.

6. Depreciation for the quarter is $18000.

7. The balance sheet as at 1 July 2017 will have the following account balances:

Cash at bank Accounts receivable Inventory Building

$39760 12 800 60400 290000

Accumulated depreciation Accounts payable Share capital Retained earnings

$94000 85370 100000 123 590

8. Budgeted sales are: July, $255000; August, $272000; September, $330000.

Required

Prepare a budgeted income statement and balance sheet for the quarter ending 30 September 2017. Ignore income tax.