Deacon Company is a merchandising company that is preparing a budget for the second quarter of the calendar year. The following information is available. DEACON COMPANY Balance Sheet March 31 Assets Cash $ 65,000 Accounts receivable 39,000 Inventory 49,000 Plant and equipment, net of depreciation 98,000 Total assets $ 251,000 Liabilities and Shareholders Equity Accounts payable $ 47,000 Common shares 63,000 Retained earnings 141,000 Total liabilities and shareholders equity $ 251,000 Budgeted Income Statements April May June Sales $ 107,000 $ 120,000 $ 138,000 Cost of goods sold 64,200 72,000 82,800 Gross margin 42,800 48,000 55,200 Selling and administrative expenses 14,000 10,000 15,000 O