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 $ $62,000$

Accounts receivable $28,000$

Inventory $40,000$

Plant and equipment, net of depreciation $95,000$

Total assets $ $225,000$

Liabilities and Shareholders$$ Equity

Accounts payable $ $48,000$

Common shares $60,000$

Retained earnings $117,000$

Total liabilities and shareholders$$ equity $ $225,000$

Budgeted Income Statements

April May June

Sales $ $93,000$ $ $118,000$ $ $132,000$

Cost of goods sold $55,80070,80079,200$

Gross margin $37,20047,20052,800$

Selling and administrative expenses $16,00012,00020,000$

Operating income $ $21,200$ $ $35,200$ $ $32,800$

Budgeting Assumptions:

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.

Budgeted sales for July are $$121,000$ while the budgeted cost of goods sold is $60\%.$

$10\%$ 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.

Each month$$s ending merchandise inventory should equal $$11,000$ plus $50\%$ of the next month$$s cost of goods sold.

Depreciation expense is $$1,500$ 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.$)$