Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 73,600 39,600 66,700 192,000 $ 371,900 $ 167,300 70,000 134,600 $ 371,900 Budgeted Income Statements April Sales $ 189,000 Cost of goods sold 113,400 Gross margin 75,600 Selling and administrative expenses_19,900 Net operating income $ 55,700 May $199,000 119,400 79,600 21,400 $ 58,200 June $219,000 131,400 87,600 24,400 $ 63,200 Budgeted Income Statements April Sales $ 189,000 Cost of goods sold 113,400 Gross margin 75,600 Selling and administrative expenses_19,900 Net operating income $ 55,700 May $199,000 119,400 79,600 21.400 $ 58,200 June $ 219,000 131,400 87,600 24,400 $ 63,200 Budgeting Assumptions: a. 60% of sales are cash sales and 40% of sales are credit sales. Twenty percent of all credit sales are collected in the month of sale and the remaining 80% are collected in the month subsequent to the sale. b. Budgeted sales for July are $229,000. c. 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. The accounts payable at March 31 will be paid in April. d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold. e. Depreciation expense is $1,650 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. 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 30th. (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 30th balance sheet.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the expected cash collections for April, May, and June. April May June Quarter Total cash collections Required 1 Required 2 >
