The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as

Question

The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is given below Snapshot, Inc. Balance Sheet May 31 s 11,000 The company is in the process of preparing a budget for June and has assembled the following data: Sales are budgeted at $320,000 for June. Of these sales, $80,000 will be for cash; the remainder will be credit sales. One-hailf of a month's 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 $270,000 during June. These purchases will all be on account. Forty 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. The June 30 inventory balance is budgeted at $50.000 d Selling and administrative expenses for June are budgeted at S62,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,700 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 $1,000, which will be paid in cash. New warehouse equipment costing $11,000 will be purchased for During June, the company will borrow $25,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year Prepare schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventory purchases

Explanation / Answer

1a) Schedule of expected cash collections (Amount in $)

Schedule of expected cash Disbursements (Amount in $)

1b) Snapshot, Inc.

Cash Budget for the month of June (Amount in $)

2) Snapshot, Inc.

Budgeted Income Statement for the month of June (Amount in $)

3) Snapshot, Inc.

Budgeted Balance Sheet as on June 30 (Amount in $)

Cash Sales-June 80,000 Collection on Accounts Receivable May 31 Balance 79,000 June [(320,000-80,000)*1/2] 120,000 Total Cash receipts 279,000

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