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$62,000 Accounts receivable43,600 Inventory46,000 Buildings and equipment, net of depreciation107,000 Total assets$258,600 Liabilities and Stockholders' Equity Accounts payable$63,600 Common stock70,000 Retained earnings125,000 Total liabilities and stockholders' equity$258,600 Budgeted Income Statements April May June Sales$120,000 $130,000 $150,000 Cost of goods sold72,000 78,000 90,000 Gross margin48,000 52,000 60,000 Selling and administrative expenses24,900 26,400 29,400 Net operating income$23,100$25,600$30,600 Budgeting Assumptions 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 Budgeted sales for July are $160,000 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 Each month's ending merchandise inventory should equal $10,000 plus 50 of the next month's cost of goods sold Depreciation expense is $1,900 per month All other selling and administrative expenses are paid in full in the month the expense is incurred complete 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 )

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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

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

AssetsCash$62,000

Accounts receivable43,600

Inventory46,000

Buildings and equipment, net of depreciation107,000

Total assets$258,600

Liabilities and Stockholders' Equity

Accounts payable$63,600

Common stock70,000

Retained earnings125,000

Total liabilities and stockholders' equity$258,600

Budgeted Income Statements

April......May......June

Sales$120,000.......$130,000.......$150,000

Cost of goods sold72,000......78,000......90,000

Gross margin48,000......52,000......60,000

Selling and administrative expenses24,900......26,400......29,400

Net operating income$23,100$25,600$30,600

Budgeting Assumptions:

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.
Budgeted sales for July are $160,000.
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.
Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold.
Depreciation expense is $1,900 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred.

complete 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.)