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 Accounts receivable Inventory Plant and equipment, net of depreciation Total assets Liabilities and Shareholders' Equity Accounts payable Common shares Retained earnings Total liabilities and shareholders' equity Budgeted Income Statements April Sales $ 100,000 Cost of goods sold Gross margin Selling and administrative expenses Operating income Budgeting Assumptions: $ 43,000 35,000 30,000 108,000 $216,000 $ 49,000 66,000 101,000 $216,000 60,000 40,000 18,000 May $ 114,000 68,400 June 140,000 84,000 45,600 56,000 17,000 17,000 $ 22,000 $ 28,600 $ 39,000 Budgeting Assumptions: a. 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. b. Budgeted sales for July are $126,000 while the budgeted cost of goods sold is 60%. 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 $1,400 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.) Calculate the expected cash collections for April, May, and June. Total cash collections April + May June Quarter Required 1 Required 2 > Calculate the budgeted merchandise purchases for April, May, and June. April May June Quarter Budgeted merchandise purchases < Required 1 Required 3> Calculate the expected cash disbursements for merchandise purchases for April, May, and June. April May Budgeted cash disbursements for merchandise purchases < Required 2 Required 4 > June Quarter 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.) Deacon Company Balance Sheet June 30 Assets + Total assets Liabilities and Shareholders' Equity Total liabilities and stockholders' equity