PROBLEM 3-27 Cash Collections: Cash Disbursements: Budgeted Balance Sheet LOB-2 , LOG-30. LOG-4 . LOS-10 Deacon Company is a merchandising company that is preparing a budget for the three month period ended June 30. The following information is available: Deacon Company Balance Shoot March 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total abilities and stockholders' equity $ 55,000 35,000 40,000 100.000 $231,000 $ 51,300 7,000 109.700 $231.000 Budgeted Income Statements April May June Sales $100,000 $10,000 $130,000 Cost of goods sold 60.000 66000 78.000 Gross margin 40.000 44.000 52.000 Seting and administrative expenses 15.000 16.500 19.500 Net operating income $ 25.000 $27500 $ 32,500 Budgeting Assumption: 1. Sixty percent of sales are cash sales and 40% of salts are credit sales. Twenty percent of all credit sales are collected as the month of sale and the remaining 80 are collected in the month subsequent to the sale 2. Budgeted sales for July are $140,000 3. Tes percent of mechandic story purchasti are paid in cash at the time of the purchase. The t ing 905 of purchases are credit purchases. All purchases on credit are paid in the month bequent to the purchase 4. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of poodi vold 5. Depreciation expenses 51 000 per month All other selling and administrative experies are paid in full in the mouth the expenses incurred Required: 1 Case the expected cash collections for April M ande 2. Calculate the body and purchase for April and Tone Calculate the expected cash bu t merchandit purchases for Art Stunduse Prepare a bude b ehe t You seed to calculate the capild for duris il send us to b e in tutto ante het and admire pe PROBLEM 8-27 Cash Collections; Cash Disbursements; Budgeted Balance Sheet L08-20. L08-30 Page 380 LO8-4 , LO8-10 C # Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30. The following information is available: Deacon Company Balance Sheet March 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $55,000 36,000 40,000 100,000 $231,000 $ 51,300 7,000 109.700 $231,000 Budgeted Income Statements April May June Sales $100,000 $110,000 $130,000 Cost of goods sold 60,000 66,000 78,000 Gross margin 40,000 44,000 52,000 Selling and administrative expenses 15,000 16,500 19,500 Net operating income $ 25,000 $27,500 $ 32,500 Budgeting Assumptions: 1. Sixty percent 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. 2. Budgeted sales for July are $140,000. 3. Ten percent 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. 4. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold. 5. Depreciation expense is $1,000 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 30. (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 30 balance sheet.)