Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30. The following information is available Deacon Company Balance Sheet March 31 Assets Cash 60,200 30,800 Accounts receivable Inventory Buildings and equipment, net of depreciation 60,400 124,000 $ 275,400 38 Total assets Liabilities and Stockholders' Equity Accounts payable Common stock 71,100 70,000 Retained earnings 134,300 Total liabilities and stockholders' equity $ 275,400 Budgeted Income Statements April $168,000 May $178,000 106,800 71,200 23,900 June Sales $198,000 Cost of goods sold Gross margin Selling and administrative expenses 100,800 67,200 118,800 79,200 26,900 $ 52,300 22,400 Net operating income $ 44,800 $ 47,300 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 sale and the remaining 80% are collected in the month subsequent to the sale. b. Budgeted sales for July are $208,000