The balance sheet of Photo Tec, Inc., a distributor of photographic supplies, as of May 31 is given

below:

Photo Tec, Inc.

Balance Sheet as at May 31

AssetsShs.000

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 72,000

Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000

Buildings and equipment, net of depreciation . . . . . . . 500,000

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .610,000

Liabilities and Stockholders' Equity

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000

Note payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000

Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000

Total liabilities and stockholders' equity . . . . . . . . . . .610,000

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

a. Sales are budgeted at Shs.250,000 for June. Of these sales, Shs.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 the following month. All of the May 31 accounts receivable will be collected in June. b. Purchases of inventory are expected to total Shs.200, 000during June. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder are 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 Shs.40, 000.d. Selling and administrative expenses for June are budgeted at Shs.51,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at Shs2,000for 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 Shs.500, which will be paid in cash.f. New warehouse equipment costing Shs.9, 000 will be purchased for cash during June.g. During June, the company will borrow Shs.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:

1. Prepare a cash budget for June. Support your budget with a schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventorypurchases.2. Prepare a budgeted income statement for June. 3. Prepare a budgeted balance sheet as of June 30. Show clearly the working capital