Use the information in Exercise 7-3 and the following additional information to prepare a budgeted income statement for the month of July and a budgeted balance sheet for July 31.
a. Cost of goods sold is 60% of sales.
b. Inventory at the end of June is $80,000 and at the end of July is $30,000.
c. Salaries payable on June 30 are $50,000 and are expected to be $60,000 on July 31.
d. The equipment account balance is $1,600,000 on July 31. On June 30, the accumulated depreciation on equipment is $280,000.
e. The $7,000 cash payment of interest represents the 1% monthly expense on a bank loan of $700,000.
f. Income taxes payable on July 31 are $24,600, and the income tax rate applicable to the company is 30%.
g. The only other balance sheet accounts are: Common Stock, with a balance of $850,000 on June 30; and Retained Earnings, with a balance of $931,000 on June 30.