The following data relates to the activities of Shilow Company, a wholesale distributor of consumer goods:

Current assets as of 31 March:
in advance	$	7,200
Accounts receivable	$	18,800
Inventory	$	37,800
building and equipment, network	$	123,600
Accounts payable	$	22,425
capital stock	$	150,000
Retained earnings	$	14,975

a.	Gross margin is 25% of sales.
b.	Actual and budgeted sales data:

March (actual)	47,000 $
Nisan	63,000 $
May	68,000 $
June	93,000 $
July	44,000 $

c.	60% of sales are cash and 40% are deferred. Credit sales are collected within the month following the sale. Accounts receivable on March 31 is a result of March credit sales.
d.	Each month's closing inventory should equal 80% of the next month's budgeted cost of goods sold.
e.	Half of one month's inventory purchases are paid in the month the purchase is made; the other half is paid in the next month. Accounts payable on March 31 is the result of stock purchases made in March.
f.	Monthly expenses are as follows: commissions, 12% of sales; rent, $2,000 per month; other expenses (excluding depreciation), 6% of sales. Suppose these expenses are paid monthly. Depreciation is $927 per month (includes depreciation of new assets).
g.	The equipment, which costs $1,200, will be purchased for cash in April.
h.	Management wants to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that the interest is not compounded. To the extent possible, the company would repay the loan plus any accumulated interest at the end of the quarter.

Required: 

1. Prepare a balance sheet by 30 June. 
2. Prepare an absorption cost income statement for the quarter ending June 30.