Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following Information is available boed 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 abilities and stockholders' equity $ 57,500 40,400 52,300 173,000 5 323,300 Book Print $ 115,400 70,000 137.900 5323, 100 Herences Budgeted Income Statements April May June Sales $ 141,000 $ 151,000 5 171,000 cost of goods sold 84.600 90,600 102,600 Gross margin 56,400 60,400 68,400 Selling and administrative expenses 21,100 22,500 25,600 Net operating incomo $ 35,300 $ 37.800 $ 42,800 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 $181,000 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 $1,700 per month. All other selling and administrative expenses are paid in full in the month the expenses Incurred 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 $181,000. 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 $1700 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 Quarter Total cash collections Roniliran Required 2 > 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 Total Budgeted merchandise purchases Required 1 Required 2 Required 3 Required 4 June Quarter Calculate the expected cash disbursements for merchandise purchases for April, May, and June. April May Budgeted cash disbursements for merchandise purchases 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 $ 0 Liabilities and Stockholders' Equity Total liabilities and stockholders' equity $ 0
