Phototec, Inc.

Balance Sheet

May $31$

Assets

Phototec, Inc., has not budgeted previously, and for this reason, it is limiting its master budget$-$

planning horizon to just one month ahead$-$namely, June. The company has assembled the

following budgeted data relating to June:

a$.$ Sales are budgeted at $$250,000.$ Of these sales, $$60,000$ will be for cash; the remainder will

be credit sales. One$-$half of a month's credit sales are collected in the month the sales are made,

and the remainder is collected in the month following. All of the May $31$ accounts receivable will

be collected in June.

b$.$ Purchases of invehtory are expected to total $$200,000$ during June. These purchases will all

be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the

remainder is paid in the following month. All of the May $31$ accounts payable to suppliers will be

paid during June.

c$.$ The June $30$ inventory balance is budgeted at $$40,000.$

d$.$ Operating expenses for June are budgeted at $$51,000,$ exclusive of depreciation. These

expenses will be paid in cash. Depreciation is budgeted at $$2,000$ for the month.

e$.$ The note payable on the May $31$ balance sheet will be paid during June. The company's

interest expense for June $($on all borrowing$)$ will be $$500,$ which will be paid in cash.

f$.$ New warehouse equipment costing $$9,000$ will be purchased for cash during June.

g$.$ During June, the company will borrow $$18,000$ from its bank by giving a new note payable to

the bank for that amount. The new note will be due in one year.

Required:

Prepare a cash budget for June. Support your budget with schedules showing budgeted cash

receipts from sales and budgeted cash payments for inventory purchases.

Prepare a budgeted income statement for June.

Prepare a budgeted balance sheet as of June $30.$