Accounting

 1.value:25.00 points  Exercise 20-4 Merchandising: Preparing a budgeted income statement and balance sheet LO P2Following information relates to Acco Co.  a.Beginning cash balance on July 1: $35,000.b.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.c.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.d.Budgeted cash disbursements 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 (related to June).h.Bank loan interest paid July 31: $4,620.  Additional Information:a.Cost of goods sold is 44% of sales.b.Inventory at the end of June is $56,000 and at the end of July is $224,800.c.Salaries payable on June 30 are $35,000 and are expected to be $28,000 on July 31.d.The equipment account balance is $1,120,000 on July 31. On June 30, the accumulated depreciation on equipment is $196,000.e.The $4,620 cash payment of interest represents the 1% monthly expense on a bank loan of $462,000.f.Income taxes payable on July 31 are $101,528, and the income tax rate applicable to the company is 35%.g.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