Following information relates to Acco Co.

Beginning cash balance on July 1: $35,000.

Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,204,000; June (actual), $840,000; and July (budgeted), $980,000.

Payments on merchandise purchases: 60% in the month of purchase and 40% in the month following purchase. Purchases amounts are: June (actual), $301,000; and July (budgeted), $600,000.

Budgeted cash payments for salaries in July: $147,700.

Budgeted depreciation expense for July: $8,400.

Other cash expenses budgeted for July: $105,000.

Accrued income taxes due in July: $80,000.

Bank loan interest paid in July: $4,620.

Additional Information:

Cost of goods sold is 44% of sales.

Inventory at the end of June is $56,000 and at the end of July is $224,800.

Salaries payable on June 30 are $35,000 and are expected to be $28,000 on July 31.

The equipment account balance is $1,120,000 on July 31. On June 30, the accumulated depreciation on equipment is $196,000.

The $4,620 cash payment of interest represents the 1% monthly expense on a bank loan of $462,000.

Income taxes payable on July 31 are $101,528, and the income tax rate is 35%.

The only other balance sheet accounts are: Common Stock, with a balance of $396,000 on June 30; and Retained Earnings, with a balance of $750,400 on June 30.

Prepare a budgeted income statement for the month of July and a budgeted balance sheet for July 31.

Calculate the budgeted cash receipts and cash payments.

Calculation of Cash Receipts From Sales
		------------------Collected in-------------------			July 31
	Total Sales	May	June	July	Accounts Rec.
Credit sales from:
May	$1,204,000
June	840,000
July	980,000
Totals	$3,024,000
Calculation of Cash Payments for Merchandise
		------------------Paid in-------------------		July 31
	Total Purchases	June	July	Accounts Pay.
Purchases from:
June	$301,000
July	600,000
Totals	$901,000

Prepare a budgeted income statement for the month of July and a budgeted balance sheet for July 31.

ACCO CO.
Budgeted Income Statement
For Month Ended July 31
Operating expenses:
Total operating expenses
ACCO CO.
Budgeted Balance Sheet
As of July 31
Assets
Liabilities and Equity
Liabilities
Stockholders' Equity