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 $ 68,400 Accounts receivable 35,600 Inventory 67,300 Buildings and equipment, net of depreciation 179,000 Total assets $ 350,300 Liabilities and Stockholders' Equity Accounts payable $ 155,600 Common stock 70,000 Retained earnings 124,700 Total liabilities and stockholders' equity $ 350,300 Budgeted Income Statements April May June Sales $ 191,000 $ 201,000 $ 221,000 Cost of goods sold 114,600 120,600 132,600 Gross margin 76,400 80,400 88,400 Selling and administrative expenses 16,900 18,400 21,400 Net operating income $ 59,500 $ 62,000 $ 67,000 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 $231,000 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 $1,400 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 Create 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 Assets Cash $ 68,400 Accounts receivable 35,600 Inventory 67,300 Buildings and equipment, net of depreciation 179,000 Total assets $ 350,300 Liabilities and Stockholders' Equity Accounts payable $ 155,600 Common stock 70,000 Retained earnings 124,700 Total liabilities and stockholders' equity $ 350,300

Budgeted Income Statements April May June Sales $ 191,000 $ 201,000 $ 221,000 Cost of goods sold 114,600 120,600 132,600 Gross margin 76,400 80,400 88,400 Selling and administrative expenses 16,900 18,400 21,400 Net operating income $ 59,500 $ 62,000 $ 67,000

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 $231,000.
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 $1,400 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. Create 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.)