Question:

Prepare a balance sheet as of June 30.

Royal Catering Company is preparing budgets for the second quarter ending June 30. Budgeted sales of the company's only product for the next four months are: April 70,000 units May.. 85,000 units June. 90,000 units July 50,000 units March Actual...... 60,000 units . . . The selling price is $1.20 per unit. The gross profit rate is 40% of sales, cost of good sold is therefore 60% of sales. The company collects 20% of sales in the month of the sale; 80% are collected in the month following sale. The accounts receivable balance on March 31 was $48,000. The company desires to have inventory on hand at the end of each month equal to 30% of the following month's cost of good sold. Salaries and wages are $7500 per month, shipping 6% of sales, advertising $6000 a month. Other expenses are 4% of sales. Depreciation expense is $6000 for the quarter. Purchases for equipment are $11500 in April and $3000 in May. The company has a policy to pay 50% of its inventory during the month of purchase and 50% the following month. The company has decided to pay $3500 in dividends in June. Half of a month's purchases are paid for in the month of purchase; the other half is paid for in the following month. | The accounts payable balance on March 31 was $18,300. . . . . . Net building and equipment in March 31st was $214 100. Capital stock in March 31st was $190 000; Retained earning in March 31st was $75 400. The inventory balance in March 31st was $12 600. Royal Catering Company desires a cash balance of at least $8,000 at the end of each month. The cash balance in March 31st was $9,000. A line of credit is available at a local bank that allows the company to borrow up to $15,000. a. All borrowing occurs at the beginning of the month, and must be in multiple of $1000. All repayment is made at the end of the month and must be in multiple of $1000 b. Any interest is paid only at the time of payment of principal. The interest rate is 12% per year