Exercise $8-18($Algo$)$ Cash Flows; Budgeted Income Statement and Balance Sheet $[$LO$8-2,$ LO$8-3,$ LO$8-9,$ LO$8-10]$

Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information:

Wolfpack Company

Balance Sheet

June $30$

Assets

Cash $ $78,400$

Accounts receivable $65,800$

Inventory $35,200$

Buildings and equipment, net of depreciation $214,000$

Total assets $ $393,400$

Liabilities and Stockholders$$ Equity

Accounts payable $ $60,400$

Common stock $100,000$

Retained earnings $233,000$

Total liabilities and stockholders$$ equity $ $393,400$

Budgeting Assumptions:

All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining $70\%$ are collected in the month subsequent to the sale. The accounts receivable at June $30$ will be collected in July.

All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining $80\%$ is paid in the month after the purchase.

The budgeted inventory balance at July $31$ is $$22,400.$

Depreciation expense is $$4,280$ per month. All other selling and administrative expenses are paid in full in the month the expense is incurred.

The company$$s cash budget for July shows expected cash collections of $$102,700,$ expected cash disbursements for merchandise purchases of $$72,600,$ and cash paid for selling and administrative expenses of $$20,320.$

Required:

$1.$ For the month of July, calculate the following:

a$.$ Budgeted sales

b$.$ Budgeted merchandise purchases

c$.$ Budgeted cost of goods sold

d$.$ Budgeted net operating income

$2.$ Prepare a budgeted balance sheet as of July $31.$