2.) Prepare a balance sheet as of September 30

J.Exotic Ltd. is an exotic animal park that is preparing a budget for the third quarter of the calendar year. The company's balance sheet as of June 30 is shown below: J.Exotic Ltd Balance Sheet June 30 Assets Cash Accounts receivable Inventory Plant and equipment, net of depreciation $ 81,000 127,000 53,000 210,000 Total assets $ 471,000 Liabilities and Shareholders' Equity Accounts payable Common shares Retained earnings $ 62,000 310,000 99,000 Total liabilities and shareholders' equity $ 471,000 J.Exotic's managers have made the following additional assumptions and estimates: a. Estimated sales for July, August, September, and October will be $260,000, $280,000, $270,000, and $290,000, respectively. b. All sales are on credit. Each month's credit sales are collected 25% in the month of sale and 75% in the month following the sale. c. Each month's ending inventory must equal 40% of the cost of next month's sales. The cost of goods sold is 70% of sales. The company pays for 50% of its merchandise purchases in the month of the purchase and the remaining 50% in the month following the purchase. d. Monthly selling and administrative expenses are always $66,000 ($6,000 of which is depreciation expense). e. The Schedule of Expected Cash Collections (relating to A/R) is as follows: August September July 127,000 $ 65,000 $ From A/R Sales on account July August September Total cash collections 195,000 70,000 $ 210,000 67,500 277,500 $ 192,000 $ 265,000 $ f. The Merchandise Purchases budget is as follows: July 182,000 $ August 196,000 September 189,000 $ $ 78,400 7 81,200 Budgeted cost of goods sold | Add: desired ending inventory Total needs Less: beg inventory Required purchases 5,600 271,600 78,400 193,200 270,200 75,600 194,600 53,000 207,400 $ $ $ g. The Schedule of Expected Cash Disbursements (relating to A/P) is as follows: July 62.000 August September $ 103,700 $ From A/P Purchases on account July August September Total cash disbursements 103,700 96.600 $ 96,600 97,300 193,900 $ 165,700 $ 200,300 $ Required 1) Prepare an income statement for the quarter ended September 30. J.Exotic Ltd. Income Statement For the quarter ended September 30 Sales Cost of goods sold Gross margin Selling and administrative expenses Operating income