Problem 7-20A Cash Budget; Income Statement; Balance Sheet [LO2, LO4, LO8, LO9, LO10]

The balance sheet of Phototec, Inc., a distributor of photographic supplies, as of May 31 is given below:

Phototec, Inc. Balance Sheet May 31
Assets
Cash	$	8,000
Accounts receivable		76,000
Inventory		37,000
Buildings and equipment, net of depreciation		540,000
Total assets	$	661,000
Liabilities and Stockholders' Equity
Accounts payable	$	107,000
Note payable		19,000
Capital stock		460,000
Retained earnings		75,000
Total liabilities and stockholders' equity	$	661,000

The company is in the process of preparing a budget for June and has assembled the following data:

a.	Sales are budgeted at $290,000 for June. Of these sales, $65,000 will be for cash; the remainder will be credit sales. One-half of a month