Following is selected information relating to the operations of Shilow Company, a wholesale distributor:

Balance sheet items as of March 31:

Cash

$

48,000

Accounts receivable

58,000

Inventory

104,400

Plant and equipment, net

249,000

Accounts payable

88,400

Capital shares

340,000

Retained earnings

31,000

a.	Gross margin is 25% of sales.
b.	Actual and budgeted sales data are as follows:

March (actual)	$	145,000
April		174,000
May		186,000
June		204,000
July		143,000

c.	Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.
d.	At the end of each month, inventory is to be on hand equal to 80% of the following months sales needs, stated at cost.
e.	One-half of a months inventory purchases is paid for in the month of purchase; the other half 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, $10,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $2,800 per month (includes depreciation on new assets).
g.	Equipment costing $3,400 will be purchased for cash in April.
h.	The company must maintain a minimum cash balance of $12,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month; borrowing must be in multiples of $1,000. The annual interest rate is 12%. Interest is paid only at the time of repayment of principal; figure interest on whole months (1/12, 2/12, and so forth).

Required:

Using the preceding data:

5.	Prepare an income statement for the quarter ended June 30.

6.	Prepare a balance sheet as of June 30.