Question 1 415 Marks) Soto Supplies Ltd sells carry bags for laptop computers. John Birt is responsible for preparing Soto Supplies master budget, and he has assembled the data below for May and June 2020. May ($) June ($) Cash sales 6,000 5,000 Credit sales 49,000 56,000 Credit purchases 32,000 36,000 Wages expense 12,000 13,200 Rent expense 1,200 1,200 Other miscellaneous expenses 3,200 2,400 Cost of sales 30,600 33,000 Depreciation expense 6,200 6,000 Cash proceeds from the sale of old machinery 2,000 Payment of dividends 6,000 . Collections from debtors (accounts receivable) normally have the following pattern: 30 per cent in the month of sale, 60 per cent in the month following the sale, and 10 per cent in the second month following the sale. . Credit sales in March and April were $52,000 and $44,000 respectively. . Credit purchases are paid for in the month following the purchase. Credit purchases in April were $34,000. The company plans to repay as much as the company can of a loan in June but leaving an ending cash balance at the end of June of $4,000. The payment of this loan must be included in the cash budget in June. . The cash balance at 1st May was $4,000. Wages, rent and other miscellaneous expenses are paid in the month in which the expense arises. Required: 1. Prepare a Budgeted Income Statement for the months of May and June. Budgeted Income Statement For the months of May and June May ($) June ($)