Cash$-$Ismon

Accounts receivable $-20000$

Inveritory$-36000$

Plant and Equipment net$-120000.$

Accounts Payable$-21750$

Capital Stock $-150000$

Retained earnings $-12250.$

a$)$ Gross profit is $25\%$ of sales

b$.$ Actual and budgeted sales data:

March $($actual$)50000$

Apri$-60000$

May$-72000$

June $90000$

July$-48000$

c$)$ Sales are $60\%$ for cash and $40\%$ on credit. Credit sales are collected in the month following the sale. The account receivableo at March $31$ are a result of March credit gales.

d$.)$ At the end of each month, imentory is to be on hand equal to $80\%$ of the following months sales needs, stated at cost$.$

e$)$ One half of a month's imventory purchases is paid for in the following month. The accounts payable at March $31$ are a result of March purchases of inventory:

f$)$ Monthly expenses are as follows: salaries and wages, $12\%$ of sales; rent, $$2500$ per month; other expenses $($excluding depreciation$),6\%$ of sales. Assume that these expenses are paid monthly. Depreciation is $$900$ per month $($includes depreciation on new assete$).$

$5.)$ Equipront costing $$1500$ will be purchase in for cash in April.

h$)$ The company must maintain a minimum balance ofs$4000.$ An open line of credit is available at a local bank. Ail borrowing is done at the beginning of the month, and all repayments are made at the end of a month; borrowing must be in multiple of $$1000.$ The ammal interest rate is $12\%.$ Interest is paid only at the time of repayment of pincinal

Required: Using the data above prepare:

$6.)$ Income statement for the three moxths ended June $30.$