00 Virgin 10:57 PM @ 19% [ Deacon Company is a merchandising company that is pre

Question

00 Virgin 10:57 PM @ 19% [ 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 Gompany March 31 5400 Accounts receivable Buildings and equipment, net of depreciation Liabilities and Stockholders Equity Retained eamings Total iabiies and stockholders 300 100 64,400400409 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 the month subsequent to the sale a, 80% are collected in b. Budgeted sales for July are $201,000. C. 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. d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold. e. Depreciation expense is $1,200 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.) Complete this question by entering your answers in the tabs below. Required 2 Required Calculate the expected cash collections for April, May, and June.

Explanation / Answer

1 Sales budget April May June Quarter Sales 161000 171000 191000 523000 Cash sales 96600 102600 114600 313800 Credit sales 64400 68400 76400 209200 2 Budgeted Cash receipt April May June Quarter Cash sales 96600 102600 114600 313800 0 March sales 32400 48000 80400 April Sales 12880 51520 64400 May sales 13680 54720 68400 June sales 15280 15280 Total collection 141880 215800 184600 542280 3 Purchase budget April May June Cost of goods sold 96600 102600 114600 Add Ending inventory 61300 67300 70300 Total 157900 169900 184900 Less Beginning inventory 58300 61300 67300 Required purchase 99600 108600 117600 4 Particulars April May June Quarter Cash purchase 9960 10860 11760 32580 Accounts payable 105100 105100 Payment for April 89640 89640 Payment for May 97740 97740 Payment for June 0 Total payments 115060 100500 109500 325060

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