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Exercise 22-26A Merchandising: Preparing a budgeted Income statement and balance sheet LO P4 Following information relates to Acco Co. a. Beginning cash balance on July 1: $40,000. b. Cash receipts from sales: 27% is collected in the month of sale. 50% in the next month, ona23% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual $1.376,000: June (actua). $960.000; and July (budgeted) $1,120,000 c. Payments on merchandise purchases 54% in the month of purchase and 46% in the month following purchase. Purchases amounts are: June (actual), $344.000, and July (budgeted) $600,000 d. Budgeted cash payments for salaries in July: $168,800. e. Budgeted depreciation expense for July: $9,600. 1. Other cash expenses budgeted for July: $120,000 9. Accrued income taxes due in July $80,000 1. Bank loan interest paid in July: $5.280. Additional Information: a. Cost of goods sold is 40% of sales. b. Inventory at the end of June is $64,000 and at the end of July is $216.000 c. Salaries payable on June 30 are $40,000 and are expected to be $32,000 on July 31. d. The equipment account balance is $1.280,000 on July 31. On June 30, the accumulated depreciation on equipment is $224.000. e. The $5.280 cash payment of interest represents the 1% monthly expense on a bank loan of $528,000 t. Income taxes payable on July 31 are $131712, and the income tax rate is 35%. 9. The only other balance sheet accounts are: Common Stock, with a balance of $513,440 on June 30, and Retained Earnings, with a balance of $857600 on June 30 Calculation Inc Stmt Bal Sheet Calculate the budgeted cash receipts and cash payments. Calculation of Cash Receipts From Sales -Collected in- Total Sales May June July 31 July Accounts Rec. Credit sales from: May $ June 1.376.000 960,000 1,120,000 3.456,000 July Totals $ $ 0 $ 0 $ 0 $ 0 Calculation of Cash Payments for Merchandise Paid in July 31 Total Purchases June July Accounts Pay Purchases from: June $ July Totals 344,000 600.000 944,000 $ $ 0 $ 0 $ 0 Calculation Inc Stmt Bal Sheet Prepare a budgeted Income statement for the month of July and a budgeted balance sheet for July 31. ACCO CO. Budgeted Income Statement For Month Ended July 31 Operating expenses Total operating expenses 0 0 $ 0 O ME ACCO CO. Budgeted Balance Sheet As of July 31 Assets 0 Liabilities and Equity Liabilities Stockholders' Equity