Balance Sheet

The balance sheet of Phototec, Inc., a distributor of photographic supplies, as of May 31 is given below:

Phototec, Inc.
Balance Sheet
May 31
Cash $ 11,250
Accounts receivable 75,000
Inventory 37,500
Buildings and equipment, net of depreciation


Total assets $


Liabilities and Stockholders' Equity
Accounts payable $ 90,000
Note payable 16,500
Capital stock 553,500
Retained earnings


Total liabilities and stockholders' equity $


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

Sales are budgeted at $273,000 for June. Of these sales, $75,000 will be for cash; the remainder will be credit sales. One-half of a month’s creditsales 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 becollected in June.


Purchases of inventory are expected to total $195,000 during June. These purchases will all be on account. Fifty percent of all inventory purchases arepaid 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 duringJune.

c. The June 30 inventory balance is budgeted at $32,000.

Selling and administrative expenses for June are budgeted at $31,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation isbudgeted at $4,000 for the month.


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 $500, whichwill be paid in cash.

f. New warehouse equipment costing $9,000 will be purchased for cash during June.

During June, the company will borrow $20,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in oneyear.


Prepare schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventorypurchases. (Omit the "$" sign in your response.)

Schedule of Expected Cash Collections
Cash sales-June $
Collections on accounts receivable:
May 31 balance

Total cash receipts $

Schedule of Expected Cash Disbursements
May 31 accounts payable balance $
June purchases

Total cash payments $


Prepare a cash budget for June. (Input all amounts as positive values except cash deficiency, repayments and interest which shouldbe indicated by a minus sign. Omit the "$" sign in your response.)

Phototec, Inc.
Cash Budget
For the Month of June
Cash balance, beginning $
Add receipts from customers

Total cash available

Less disbursements:
Purchase of inventory
Selling and administrative expenses
Purchases of equipment

Total cash disbursements

Excess of receipts over disbursements


Total financing

Cash balance, ending $

2. Prepare a budgeted income statement for June. (Input all amounts as positive values. Omit the "$" sign in yourresponse.)
Phototec, Inc.
Budgeted Income Statement
For the Month of June
(Click to select)SalesCost of goods soldEnding inventoryBeginning inventoryPurchases $
Cost of goods sold:
(Click to select)Cost of goods soldEnding inventoryInterest expenseSalesBeginning inventory $
(Click to select)SalesPurchasesEnding inventoryCost of goods soldInterest expense

(Click to select)Goods available for saleEnding inventoryCost of goods soldBeginning inventoryPurchases
(Click to select)Ending inventoryBeginning inventoryPurchasesCost of goods soldGoods available for sale

(Click to select)Beginning inventoryCost of goods soldInterest expensePurchasesEnding inventory

(Click to select)Ending inventoryGross marginBeginning inventoryNet operating income (loss)Net income (loss)
(Click to select)Interest expenseSelling and administrative expensesEnding inventorySalesCost of goods sold

(Click to select)PurchasesEnding inventoryNet income (loss)Gross marginNet operating income (loss)
(Click to select)Interest expenseBeginning inventoryPurchasesCost of goods soldEnding inventory

(Click to select)Ending inventoryBeginning inventoryNet operating income (loss)Net income (loss)Gross margin $


Prepare a budgeted balance sheet as of June 30. (Be sure to list the assets and liabilities in order of their liquidity. Omit the"$" sign in your response.)

Phototec, Inc.
Budgeted Balance Sheet
June 30
(Click to select)Note payableCapital stockCashAccounts payableInventory $
(Click to select)Note payableRetained earningsCapital stockBuildings and equipment, net of depreciationAccounts receivable
(Click to select)InventoryCashRetained earningsCapital stockAccounts receivable
(Click to select)Buildings and equipment, net of depreciationRetained earningsAccounts receivableNote payableCapital stock

Total assets $

Liabilities and Stockholders' Equity
(Click to select)Note payableAccounts receivableInventoryAccounts payableCapital stock $
(Click to select)Accounts receivableNote payableRetained earningsInventoryCash
(Click to select)InventoryCapital stockAccounts receivableBuildings and equipment, net of depreciationRetained earnings
(Click to select)Accounts receivableAccounts payableRetained earningsCashInventory

Total liabilities and equity $


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