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 1^st 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 ($)	June ($)

2. Prepare a schedule of estimated receipts from debtors (accounts receivable) for the months of May and June.

		Month of cash collection
Month	Credit Sales	May	June

3. What is the amount of accounts receivable at 30^th June?

4.Prepare a cash budget for May and June

	May ($)	June ($)

5. What is the amount of accounts payable at 30^th June?