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 $ 60,000 36,000 31,000 103,000 $ 230,000 $ 42,000 67,000 121,000 $ 230,000 65,400 May $ 110,000 66,000 44,000 11,000 June $ 136,000 81,600 54,400 10,000 Budgeted Income Statements April Sales $ 109,000 Cost of goods sold Gross margin 43,600 Selling and administrative expenses 11,000