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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 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 58,200 34,800 68, see 118, 880 $ 279,500 5 95, eee 70, eee 114,500 $ 279,500 Budgeted Income Statements April Sales $195,000 Cost of goods sold 117,600 Gross margin 78,000 Selling and administrative expenses 18,600 Net operating income 3.59,400 May $205,000 123,eee 82,000 20, 100 $ 61,900 June $225,000 135,000 90,000 23,100 $ 66,900 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 $235,000. c. 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 d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold 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 $235,000. c. 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. d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold e Depreciation expense is $1,350 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 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) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the expected cash collections for April, May, and June. April May June Total cash collections Quarter Red Required 2 > 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 $235,000. c. 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. d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold. e. Depreciation expense is $1,350 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 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) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the budgeted merchandise purchases for April, May, and June. April May June Budgeted merchandise purchases Total udgeting Assumptions: 2. 60% of sales are cash sales and 40% of sales are credit sales. Twenty percent of all credit sales are collected in and the remaining 80% are collected in the month subsequent to the sale. . Budgeted sales for July are $235,000. C. 10% of merchandise inventory purchases are paid in cash at the time of the purchase. The remaining 90% of pu purchases. All purchases on credit are paid in the month subsequent to the purchase. The accounts payable at paid in April. d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods e. Depreciation expense is $1,350 per month. All other selling and administrative expenses are paid in full in the m- 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 30th. (Hint: You need to calculate the cash paid for selling and adminis during April, May, and June to determine the cash balance in your June 30th balance sheet.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 May Quarter Calculate the expected cash disbursements for merchandise purchases for April, May, and June. April June Budgeted cash disbursements for merchandise purchases Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare 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.) Deacon Company Balance Sheet June 30 Assets Total assets Liabilities and Stockholders' Equity Total liabilities and stockholders' equity
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