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he Statement of Financial Position of Picture This, Inc., a distributor of photographic supplies, as of May 31 is given below:

PICTURE THIS, INC.

Statement of Financial Position

May 31

Assets

Cash 8,000

Accounts receivable 72,000

Inventory 30,000

Building 500,000

Total assets 610,000

Liabilities and Equity

Accounts payable, suppliers 90,000

Notes payable 15,000

Share capital, no par 420,000

Retained earnings 85,000

Total liabilities and equity 610,000

Picture This, Inc. has not budgeted previously, and for this reason it is limiting its master budget planning horizon to just one month ahead namely, June. The company has assembled the following budgeted data relating to June:

1. Sales are budgeted at P250,000. Of these sales, P60,000 will be for cash; the remainder will be credit sales. One-half of a months credit sales are collected in the month the sales are made, and the remainder is collected in the month following. All of the May 31 accounts receivable will be collected in June.
2. Purchases of inventory are expected to total P200,000 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 is paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.
3. The June 30 inventory balance is budgeted at P40,000.
4. Operating expenses for June are budgeted at P51,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at P2,000 for the month.
5. The note payable on the May 31 statement of financial position will be paid during June. The companys interest expense for June (on all borrowing) will be P500, which will be paid in cash.
6. New warehouse equipment costing P9,000 will be purchased for cash during June.
7. During June, the company will borrow P18,000 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:

Prepare a cash budget for June. Support your budget with schedules showing budgeted cash receipts from sales and budgeted cash payments for inventory purchases. Submit your answer in Excel or Word format.

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