Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information:
Wolfpack Company
Balance Sheet
June 30
Assets
Cash $ 75,000
Accounts receivable 50,000
Inventory 30,000
Buildings and equipment, net of depreciation 150,000
Total assets $ 305,000
Liabilities and Stockholders’ Equity
Accounts payable $ 35,300
Common stock 100,000
Retained earnings 169,700
Total liabilities and stockholders’ equity $ 305,000
Budgeting Assumptions:
All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July.
All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase.
The budgeted inventory balance at July 31 is $22,000.
Depreciation expense is $3,000 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred.
The company’s cash budget for July shows expected cash collections of $77,000, expected cash disbursements for merchandise purchases of $44,500, and cash paid for selling and administrative expenses of $15,000.
Prepare a balanced budget sheet as of July 1st.