Deacon Company is a merchandising company that is preparing a budget for the second quarter of the calendar year. The following information is available.

DEACON COMPANY

Balance Sheet

March $31$

Assets

Cash $ $54,000$

Accounts receivable $40,000$

Inventory $45,000$

Plant and equipment, net of depreciation $90,000$

Total assets $ $229,000$

Liabilities and Shareholders$$ Equity

Accounts payable $ $51,000$

Common shares $79,000$

Retained earnings $99,000$

Total liabilities and shareholders$$ equity $ $229,000$

Budgeted Income Statements

April May June

Sales $ $92,000$ $ $114,000$ $ $137,000$

Cost of goods sold $55,20068,40082,200$

Gross margin $36,80045,60054,800$

Selling and administrative expenses $12,00011,00010,000$

Operating income $ $24,800$ $ $34,600$ $ $44,800$

Budgeting Assumptions:

Sixty percent of sales are cash sales and $40$ percent of sales are credit sales. Twenty percent of all credit sales are collected in the month of sale and the remaining $80$ percent are collected in the month subsequent to the sale.

Budgeted sales for July are $$133,000$ while the budgeted cost of goods sold is $60\%.$

$10\%$ of merchandise inventory purchases are paid in cash at the time of the purchase. The remaining $90\%$ of purchases are credit purchases. All purchases on credit are paid in the month subsequent to the purchase.

Each month$$s ending merchandise inventory should equal $$13,000$ plus $50\%$ of the next month$$s cost of goods sold.

Depreciation expense is $$1,400$ per month. All other selling and administrative expenses are paid in full in the month the expense is incurred.

Required:

$1.$ Calculate the expected cash collections for April, May, and June.

$2.$ Calculate the budgeted merchandise purchases for April, May, and June.

$3.$ Calculate the expected cash disbursements for merchandise purchases for April, May, and June.

$4.$ Prepare a budgeted balance sheet at June $30.($Hint: You need to calculate the cash paid for selling and administrative expenses during April, May, and June to determine the cash balance in your June $30$ balance sheet.$)$