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	$	62,000
Accounts receivable		43,600
Inventory		46,000
Buildings and equipment, net of depreciation		107,000
Total assets	$	258,600
Liabilities and Stockholders Equity
Accounts payable	$	63,600
Common stock		70,000
Retained earnings		125,000
Total liabilities and stockholders equity	$	258,600

Budgeted Income Statements
	April			May			June
Sales	$	120,000		$	130,000		$	150,000
Cost of goods sold		72,000			78,000			90,000
Gross margin		48,000			52,000			60,000
Selling and administrative expenses		24,900			26,400			29,400
Net operating income	$	23,100		$	25,600		$	30,600

Budgeting Assumptions:

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.

Budgeted sales for July are $160,000.

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 months ending merchandise inventory should equal $10,000 plus 50% of the next months cost of goods sold.

Depreciation expense is $1,900 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.)