Deacon Company is a merchandising information is available handising company that is preparing a budget for the three-month period ended June 30th. The folowing is preparing Deacon Company Balance Sheet March 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets $ 71,400 38,000 56, 800 121,000 $ 287,200 Liabilities and Stockholders Equity Accounts payable Common ntock Retained earnings $79, 300 0,000 137,900 $ 287,200 Total 1iabilities and stockholdera equity Budgeted Incone Statements April Hay 156,000 166,000 186, 000 93,600 99,600111,600 June Sales Cost of goods sold Gross margin 62, 400 66, 400 74,400 Selling and administrative expenses 23,000 24,500 2500 8 39,400 41,90046,900 Net operating income Budgeting Assumptions: a, 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 b. Budgeted sales for July are $196,000 and the remaining 80% are collected in the month subsequent to the sale. 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. Budgeting Assumptions: a, 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. b. Budgeted sales for July are $196,000. 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. The accounts payable at March 31 will be paid in April. d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold e. Depreciation expense is $1,550 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.) Complete this question by entering your answers in the tabs below Required 1Required 2 Required 3 Required 4 Calculate the expected cash collections for April, May, and June. May June Quarter April Total cash collections Required 2> Required 1 Required 1Required 2 Required 3 Required 4 Calculate the budgeted merchandise purchases for April, May, and June. May Budgeted merchandise purchases Required 3> Required 1 Required 2 Required 3 Required 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.) Deacon Company Balance Sheet June 30 Assets Total assets Liabilities and Stockholders' Equity Total liabilities and stockholders' equity K Required 3
