Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Balance Sheet Assets Cash 60,200 30,800 60,400 Accounts receivable Inventory Buildings and equipment, net of depreciation124,000 Total assets Liabilities and Stockholders Equity 275,400 Accounts payable $71,100 70,000 134 300 $ 275,400 Common stock Total liabilities and stockholders' equity Budgeted Income Statements April Hay Sales Cost of goods sold $168,000 $178,00 $198,000 100-800 106,800118,800 1,200 Gross margin 67,200 79.200 1ling and administrative expenses 22 400 23,900 26,900 Net operating income 44,800 47,300$52,300 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 s and the remaining 80% are collected in the month subsequent to the sale. b. Budgeted sales for July are $208,000. 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 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 $1,100 per month. All other selling and administrative expenses are paid in full in the month the expense is Prev 3 of 4 Next >