Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The balance sheet of Photoec, Inc., as of May 31 is now given below: PHOTOTEC, INC Balance Sheet May 31 Assets Cash $8,000 Accounts receivable.

image text in transcribed
The balance sheet of Photoec, Inc., as of May 31 is now given below: PHOTOTEC, INC Balance Sheet May 31 Assets Cash $8,000 Accounts receivable. 72,000 Inventory 30,000 Plant and equipment, net of depreciation.. 500.000 Total assets $610,000 Liabilities and Stockholders' Equity Accounts payable, suppliers. $90,000 Note payable.. 15,000 Capital stock, no par. 420,000 Retained Earnings. 85.000 Total liabilities and stockholder's equity. $610,000 E Phototec, Inc. has not budgeted previously, and for this reason it is limiting its master budget planning horizon to just one month ahead-namely, June. The company has assembled the following budgeted data relating to June: a_Sales are budgeted at $250,000. Of these sales, $60.000 will be for cash; the remainder will be credit sales. One 50%. half of the month's credit sales are collected in the month sales are made, and the remainder is collected in the moth following. All of the May 31 accounts receivable will be collected in June. b. Purchases of inventory are expected to total $200,000 during June. These purchases will all be on account. Forty 400 percent of all inventory purchases are paid for in the month of purchase; the remainder is paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June. The June 30 inventory balance is budgeted at $40,000 d. Operating expenses for June are budgeted at $31.000, exclusive of depreciation. These expenses will all be paid in cash. Depreciation is budgeted at $2,000 for the month. e. The note payable on May 31 balance sheet will be paid during June. The company's interest expense for June (on all borrowing) will be $500, which will be paid in cash. f New equipment costing $9,000 will be purchased for cash during June g. During June, the company will borrow $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 schedules showing budgeted cash receipts from sales and budgeted cash payments for inventory purchases

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl S. Warren, Philip E. Fess, James M. Reeve, C.Rollin Niswonger, Jim Reeve

18th Edition

0538839333, 978-0538839334

More Books

Students also viewed these Accounting questions

Question

Explain how to reward individual and team performance.

Answered: 1 week ago