The balance sheet of Phototec, Inc., a distributor of photographic supplies, as
ID: 2374179 • Letter: T
Question
The balance sheet of Phototec, Inc., a distributor of photographic supplies, as of May 31 is given below:
Phototec, Inc.
Balance Sheet
May 31
Assets
Cash $ 10,950
Accounts receivable 73,000
Inventory 36,500
Buildings and equipment, net of depreciation 609,550
Total assets $ 730,000
Liabilities and Stockholders' Equity
Accounts payable $ 87,600
Note payable 16,060
Capital stock 538,740
Retained earnings 87,600
Total liabilities and stockholders' equity $ 730,000
The company is in the process of preparing a budget for June and has assembled the following data:
a. Sales are budgeted at $270,000 for June. Of these sales, $75,000 will be for cash; the remainder will be credit sales. One-half of a month%u2019s 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 $191,000 during June. These purchases will all be on account. Sixty 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 $34,000.
d. Selling and administrative expenses for June are budgeted at $34,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,000 for the month.
e. The note payable on the May 31 balance sheet will be paid during June. The company%u2019s interest expense for June (on all borrowing) will be $700, which will be paid in cash.
f. New warehouse equipment costing $9,000 will be purchased for cash during June.
g. During June, the company will borrow $20,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.
Required:
1a. Prepare schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventory purchases. (Omit the "$" sign in your response.)
Schedule of Expected Cash Collections
Cash sales-June $ 75000
Collections on accounts receivable:
May 31 balance 73000
June
Total cash receipts $
Schedule of Expected Cash Disbursements
May 31 accounts payable balance $ 87600
June purchases
Total cash payments $
1b. Prepare a cash budget for June. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Omit the "$" sign in your response.)
Phototec, Inc.
Cash Budget
For the Month of June
Cash balance, beginning $ 10950
Add receipts from customers
Total cash available
Less disbursements:
Purchase of inventory 191000
Selling and administrative expenses 34000
Purchases of equipment 9000
Total cash disbursements 234000
Excess of receipts over disbursements 191000
Financing:
Borrowings-note 20000
Repayments-note 16060
Interest 700
Total financing 36760
Cash balance, ending $
2. Prepare a budgeted income statement for June. (Input all amounts as positive values. Omit the "$" sign in your response.)
Phototec, Inc.
Budgeted Income Statement
For the Month of June
(Click to select)Beginning inventoryEnding inventoryCost of goods soldPurchasesSales $
Cost of goods sold:
(Click to select)Ending inventoryBeginning inventoryInterest expenseCost of goods soldSales $
(Click to select)PurchasesInterest expenseEnding inventorySalesCost of goods sold
(Click to select)Ending inventoryPurchasesCost of goods soldGoods available for saleBeginning inventory
(Click to select)Goods available for saleBeginning inventoryEnding inventoryPurchasesCost of goods sold
(Click to select)Interest expenseEnding inventoryPurchasesCost of goods soldBeginning inventory
(Click to select)Ending inventoryBeginning inventoryGross marginNet income (loss)Net operating income (loss)
(Click to select)Interest expenseEnding inventorySalesSelling and administrative expensesCost of goods sold
(Click to select)Gross marginEnding inventoryNet income (loss)PurchasesNet operating income (loss)
(Click to select)Beginning inventoryCost of goods soldInterest expensePurchasesEnding inventory
(Click to select)Net income (loss)Beginning inventoryGross marginNet operating income (loss)Ending inventory $
3. 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
Assets
(Click to select)CashAccounts payableInventoryNote payableCapital stock $
(Click to select)Buildings and equipment, net of depreciationRetained earningsCapital stockNote payableAccounts receivable
(Click to select)InventoryCapital stockAccounts receivableRetained earningsCash
(Click to select)Buildings and equipment, net of depreciationRetained earningsAccounts receivableCapital stockNote payable
Total assets $
Liabilities and Stockholders' Equity
(Click to select)Capital stockInventoryAccounts receivableAccounts payableNote payable $
(Click to select)Retained earningsAccounts receivableNote payableInventoryCash
(Click to select)Accounts receivableCapital stockBuildings and equipment, net of depreciationInventoryRetained earnings
(Click to select)InventoryAccounts payableRetained earningsCashAccounts receivable
Total liabilities and equity $
Explanation / Answer
1 PHOTOTEC, INC.
Schedule of Cash Receipts
Cash Sales June $250,000
Collections on Accounts Receivable
May 31st balance 72,000
June 155,000
Total Cash Receipts $227,000
Schedule of Cash Payments for purchases
May 31 Accounts Payable Balance $90,000
June Purchases 80,000
Total Cash Payments $170,000
PHOTOTEC, INC.
June Cash Budget
Cash balance, beginning $107,000
Add receipts from customers $72,000
Total Cash Available $179,000
Less Disbursements:
Purchase of Inventory 80000
Operating Expenses 49000
Purchase of Equipment 9000
Total Cash Disbursement 138,000
Excess of receipts over disbursement 41000
Financing:
Borrowing Note 18,000
Repayment Note 15,000
Interest 500
Total Financing 33,500
Cash balance, ending $7,500
2 PHOTOTEC, INC.
June Income Statement
Sales $250,000
Cost of Goods Sold:
Beginning Inventory 30000
Add Purchases 200000
Goods available for sale 230000
Ending Inventory 40000
Cost of good sold 190000
Gross Margin 60000
Selling & Administrative expenses 53000
Net operating income 7000
Interest expense 500
Net Income $6,500
3 PHOTOTEC, INC.
Balance Sheet June 30
Assets
Cash $7,500
Accounts receivable 95,000
Inventory 40,000
Buildings and equipment, net of depreciation 507,000
Total assets $649,500
Liabilities and Stockholders' Equity
Accounts payable $120,000
Note payable 18,000
Capital stock, no par 420,000
Retained earnings 91,500
Total liabilities and stockholders' equity $649,500
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.