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	$	59,000
Accounts receivable		44,000
Inventory		41,000
Plant and equipment, net of depreciation		110,000
Total assets	$	254,000
Liabilities and Shareholders Equity
Accounts payable	$	51,000
Common shares		65,000
Retained earnings		138,000
Total liabilities and shareholders equity	$	254,000

Budgeted Income Statements
	April			May			June
Sales	$	100,000		$	111,000		$	120,000
Cost of goods sold		50,000			57,000			75,000
Gross margin		50,000			54,000			45,000
Selling and administrative expenses		14,000			12,000			18,000
Operating income	$	36,000		$	42,000		$	27,000

Budgeting Assumptions:

1. 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.
2. Budgeted sales for July are $129,000.
3. 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.
4. Each months ending merchandise inventory should equal $10,000 plus 50% of the next months cost of goods sold.
5. 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.)

Deacon Company Balance Sheet June 30 Assets Total assets $ 0 Liabilities and Shareholders' Equity Total liabilities and stockholders' equity $ 0