The following information relates to Acco Co.:

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

b. Cash receipts from sales: 27% is collected in the month of sale, 50% in the next month, and 23% 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.

c. Payments on merchandise purchases: 54% in the month of purchase and 46% in the month following purchase. Purchases amounts are: June (actual), $301,000; and July (budgeted), $600,000.

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

e. Budgeted depreciation expense for July: $8,400.

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

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

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

Additional Information:

i. Cost of goods sold is 40% of sales.

j. Inventory at the end of June is $56,000 and at the end of July is $264,000.

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

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

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

n. Income taxes payable on July 31 are $98,784, and the income tax rate is 30%.

o. The only other balance sheet accounts are: Common Stock, with a balance of $439,260 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.

Calculation of Cash Receipts From Sales Collected in July 31 Total Sales May June July Accounts Rec. Credit sales from May June July Totals $ 1,204,000$ 325,080$ 602,000 276,920$ 193,200 715,400 $3,024,000 $325,080$ 828,800$961,520$ 908,600 840,000 0 226,800 420,000 980,000 0 0 264,600 Calculation of Cash Payments for Merchandise Paid in July 31 Total Purchases June July Accounts Pay Purchases from June July Totals 301,000$162,540$ 138,460 $ 600,000 901,000$162,540 $462,460 $276,000 0 324,000 276,000