6.17 A budget is being prepared for the first and second quarters of 19B for Aggarwal Retail Stores, Inc. The balance sheet as of December 31, 19A, is given below. AGGARWAL RETAIL STORES, INC. h21 Balance Sheet December 31, 19A ASSETS LIABILITIES AND EQUITIES Cash $ 65,000 Accounts Payable $ 83,000 Accounts Receivable 52,000 Income Tax Payable 20,000 Merchandise Inventory 75,000 Capital Stock 70,000 Retained Earnings 19,000 Total Assets $192,000 Total Liabilities and Equities $192,000 Actual and projected sales are: 19A 3d quarter (actual) $250,000 19A 4th quarter (actual) 300,000 19B 1st quarter (estimated) 200,000 19B 2d quarter (estimated) 230,000 19B 3d quarter (estimated) 220,000 Experience has shown that 60 percent of sales will be collected during the quarter of sales and 35 percent of sales will be collected in the following quarter. Gross profit averages 30 percent of sales. There is a basic inventory of $20,000. The policy is to purchase additional inventory each quarter in the amount necessary to provide for the following quarter's sales. Assume that payments are made in the quarter following the quarter of purchase. Selling and administrative expenses for each quarter are estimated at 4 percent of sales plus $15,000. They are paid as incurred. Income tax is equal to 40 percent of taxable income. The income tax liability as of December 31, 19A, is to be paid during the first quarter of 19B. Prepare a budgeted income statement for the first and second quarters of 19B and a budgeted balance sheet as of June 30, 19B