The Management of Staples Pty Ltd operating in Retail business have provided you with the following information for the period 1 April 31 July 2022. You are required to use the information to prepare a Budgeted Income Statement and Cash Budget. (For the purpose of Budget Calculation in the assessment, ignore all GST calculations)

Following a meeting with management and the business owners the following budget milestones were established.

Accounts Balances 1 April	$	$
Cash at Bank	4,362
Inventories	23,438
Accounts Receivable (net)	12,000
Prepaid Rent	1,000
Furniture & Equipment	27,000
Accumulated Depreciation Furniture & Equipment		4,600
Plant & Machinery	54,000
Accumulated Depreciation Plant & Machinery		22,400
Accounts Payable		7,000
Accrued Wages		986
Bank Loan		48,000
Share Capital		30,000
Retained Earnings		8,814
Totals	$121,800	$121,800

Budgeted Sales:

April 25,000

May 27,000

June 20,000

July 23,500

(Note: All amounts calculated to be rounded with no decimal)

• Cash Sales account for 50% of sales. Credit sales are collected 40% in the month of sale and 60% in the following month.
• Purchases are expected to be made at the rate of 55% of expected sales for each month and are purchased on credit. The company requires the monthly ending inventory balance to be $20,000 plus 25% of the next months purchases.
• Creditors are paid 20% in the month of purchase and 80% in the next month.
• Dividends are paid by the business at the rate of $4,000 per quarter.
• Rent on premises is $3,000 per quarter, paid on the last day of the first month of each quarter.
• Wages are normally paid as incurred and this will occur in the quarter ended 30 June. In the quarter ended 31 March, pay day fell on 25th March so 6 days wages were outstanding at 31 March and are yet to be paid. Wages are normally incurred at the rate of $5,000 per month.
• The following are paid as incurred: electricity $400 per month, interest on loan $180 per month and cleaning contractor $200 per month. The loan principal is paid at the rate of $2,000 per quarter.
• Depreciation is charged at 10% per annum on the cost of the furniture and equipment and 15% per annum on the cost of the plant and machinery.
• New machinery will be purchased for cash on 30th June for $10,000

1. Prepare a Budgeted Income Statement