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 $ 73,600 Accounts receivable 39,600 Inventory 66,700 Buildings and equipment, net of depreciation 192,000 Total assets $ 371,900 Liabilities and Stockholders Equity Accounts payable $ 167,300 Common stock 70,000 Retained earnings 134,600 Total liabilities and stockholders equity $ 371,900 Budgeted Income Statements April May June Sales $ 189,000 $ 199,000 $ 219,000 Cost of goods sold 113,400 119,400 131,400 Gross margin 75,600 79,600 87,600 Selling and administrative expenses 19,900 21,400 24,400 Net operating income $ 55,700 $ 58,200 $ 63,200 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 $229,000 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 $1,650 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	$	73,600
Accounts receivable		39,600
Inventory		66,700
Buildings and equipment, net of depreciation		192,000
Total assets	$	371,900
Liabilities and Stockholders Equity
Accounts payable	$	167,300
Common stock		70,000
Retained earnings		134,600
Total liabilities and stockholders equity	$	371,900

Budgeted Income Statements
	April		May		June
Sales	$	189,000	$	199,000	$	219,000
Cost of goods sold		113,400		119,400		131,400
Gross margin		75,600		79,600		87,600
Selling and administrative expenses		19,900		21,400		24,400
Net operating income	$	55,700	$	58,200	$	63,200

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 $229,000.
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 $1,650 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.)