Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash $ 73, 600 Accounts receivable 39, 600 Inventory 66,700 Buildings and equipment, net of depreciation 192,000 Total assets $371,900 Liabilities and Stockholders' Equity Accounts payable $ 167,300 Common stock 70,000 Retained earnings 134,600 Total liabilities and stockholders' equity $ 371,900 Budgeted Income Statements April May June Sales $ 189,000 $ 199,000 $ 219,000 Cost of goods sold 113,400 119,400 131, 400 Gross margin 75, 600 79, 600 87, 600 Selling and administrative expenses 19,900 21,400 24,400 Net operating income $ 55,700 $ 58,200 $ 63,200 Budgeting Assumptions: 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. Budgeted sales for July are $229,000. 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. Each month's ending merchandise inventory should equal $10.000 plus 50% of the next month's
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash $ 73, 600 Accounts receivable 39, 600 Inventory 66,700 Buildings and equipment, net of depreciation 192,000 Total assets $371,900 Liabilities and Stockholders' Equity Accounts payable $ 167,300 Common stock 70,000 Retained earnings 134,600 Total liabilities and stockholders' equity $ 371,900 Budgeted Income Statements April May June Sales $ 189,000 $ 199,000 $ 219,000 Cost of goods sold 113,400 119,400 131, 400 Gross margin 75, 600 79, 600 87, 600 Selling and administrative expenses 19,900 21,400 24,400 Net operating income $ 55,700 $ 58,200 $ 63,200 Budgeting Assumptions: 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. Budgeted sales for July are $229,000. 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. Each month's ending merchandise inventory should equal $10.000 plus 50% of the next month's
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Deacon Company is a merchandising company that is preparing a budget for the three month period ended June 30th. The following information is available Deacon Company
Balance Sheet March 31 Assets Cash $ 73, 600 Accounts receivable 39, 600 Inventory 66, 700 Buildings and equipment, net of depreciation 192,000 Total assets $ 371,900 Liabilities
and Stockholders' Equity Accounts payable $ 167,300 Common stock 70, 000 Retained earnings 134, 600 Total liabilities and stockholders' equity $ 371, 900 Budgeted Income
Statements April May June Sales $ 189,000 $ 199, 000 $ 219,000 Cost of goods sold 113, 400 119,400 131, 400 Gross margin 75, 600 79, 600 87, 600 Selling and administrative
expenses 19,900 21,400 24, 400 Net operating income $ 55,700 $ 58, 200 $ 63,200 Budgeting Assumptions: 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. Budgeted sales for July are $229,000. 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. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's
cost of goods sold. Depreciation expense is $1,650 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.) Answer is not complete. Complete this question by entering your
answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the expected cash collections for April, May, and June.
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Total cash collections
Answer is not complete.
April
$ 168,120 $
Calculate the expected cash collections for April, May, and June.
May
June
195,800 $ 212,600
Required 4
Required 1
Quarter
$ 576,520
Required 2 >
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