Deacon Company is a merchandising company that is preparing a budget for the second quarter of the calendar year. The following information is available.

Budgeting Assumptions:

a$.$ 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.

b$.$ Budgeted sales for July are $$134,000$ while the budgeted cost of goods sold is $60\%.$

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.

d$.$ Each mor$$th$\text{'}$s ending merchandise inventory should equal $$13,000$ plus $50\%$ of the next month's cost of goods sold.

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