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 $ 65,200 Accounts receivable 38,800 Inventory 43,300 Buildings and equipment, net of depreciation 125,000 Total assets $ 272,300 Liabilities and Stockholders Equity Accounts payable $ 66,200 Common stock 70,000 Retained earnings 136,100 Total liabilities and stockholders equity $ 272,300 Budgeted Income Statements April May June Sales $ 111,000 $ 121,000 $ 141,000 Cost of goods sold 66,600 72,600 84,600 Gross margin 44,400 48,400 56,400 Selling and administrative expenses 23,300 24,800 27,800 Net operating income $ 21,100 $ 23,600 $ 28,600 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 $151,000 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 The accounts payable at March 31 will be paid in April Each months ending merchandise inventory should equal $10,000 plus 50 of the next months cost of goods sold Depreciation expense is $1,600 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 )

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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	$	65,200
Accounts receivable		38,800
Inventory		43,300
Buildings and equipment, net of depreciation		125,000
Total assets	$	272,300
Liabilities and Stockholders Equity
Accounts payable	$	66,200
Common stock		70,000
Retained earnings		136,100
Total liabilities and stockholders equity	$	272,300

Budgeted Income Statements
	April		May		June
Sales	$	111,000	$	121,000	$	141,000
Cost of goods sold		66,600		72,600		84,600
Gross margin		44,400		48,400		56,400
Selling and administrative expenses		23,300		24,800		27,800
Net operating income	$	21,100	$	23,600	$	28,600

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 $151,000.
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. The accounts payable at March 31 will be paid in April.
Each months ending merchandise inventory should equal $10,000 plus 50% of the next months cost of goods sold.
Depreciation expense is $1,600 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.)