Beech Corporation is a merchandising company that is preparing a master budget f
ID: 1189888 • Letter: B
Question
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
rev: 09_17_2014_QC_54310
3.
value:
5.00 points
Required information
Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively.
All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 30% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $60,000. Each month $5,000 of this total amount is depreciation expense and the remaining $55,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.
Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.
Prepare an income statement for the quarter ended September 30.
Prepare a balance sheet as of September 30.
rev: 09_17_2014_QC_54310
References
eBook & Resources
WorksheetLearning Objective: 08-02 Prepare a sales budget, including a schedule of expected cash collections.Learning Objective: 08-09 Prepare a budgeted income statement.
Difficulty: 1 EasyLearning Objective: 08-04 Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.Learning Objective: 08-10 Prepare a budgeted balance sheet.
Check my work
4.
value:
5.00 points
Required information
Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively.
All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 20% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $60,000. Each month $5,000 of this total amount is depreciation expense and the remaining $55,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.
Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.
Prepare an income statement for the quarter ended September 30.
Prepare a balance sheet as of September 30.
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
Explanation / Answer
(1) Cash Collections Statement
(2-a) Purchases schedule for the quarter
Ending Inventory = Beginning Inventory + Purchases - COGS
Purchases = Ending Inventory + COGS - Beginning Inventory
Note:
1. Cost of Sales = COGS + Selling & Admin Expense (Excluding Depreciation)
(2-b) Cash disbursement schedule for the quarter
NOTE: Out of 4 questions, the first 2 are answered.
CASH COLLECTIONS STATEMENT (All Values in $) July Aug Sept Oct TOTAL Sales 2,10,000 2,30,000 2,20,000 2,40,000 9,00,000 Cash collected: Same Month@35% 73,500 80,500 77,000 84,000 3,15,000 Cash collected: 65% of Last Month's Sales 1,36,500 1,49,500 1,43,000 4,29,000 Accounts Receivable Collected from June 1,36,000 1,36,000 Total Cash Collections 2,09,500 2,17,000 2,26,500 2,27,000 8,80,000 TOTAL CASH COLLECTION DURING QUARTER 6,53,000Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.