Check my work The following information applies to the questions displayed below

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Check my work The following information applies to the questions displayed below. 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 Beech Corporation Balance Sheet June 30 Assets Cash Accounts receivable Inventory Plant and equipment, net of depreciation Total assets $ 93,000 127,000 45,000 219,000 484,000 Liabilities and Stockholders Equity Accounts payable Common stock $ 80,000 330,000 74,000 484,000 Total liabilitien and stockholders' equity Exercise 8-12 Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August,September, and October will be $300,000, $320,000, $310,000, and $330,000, 2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month 3. Each month's ending inventory must equal 25% of the cost of next month? sales. The cost of goods sold is 60% of respectively of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 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. 4. Monthly selling and administrative expenses are always $56,000. Each month $6,000 of this total amount is depreclation expense and the remaining $50,000 relates to expenses that are paid in the month they are incurred 5. 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

Explanation / Answer

Sales Budget Jul Aug Sep Total Total Sales in $              300,000              320,000              310,000              930,000 Answer 1. Schedule of Expected Cash Collections from Sales Jul Aug Sep Total Collection from Accounts Receivables June Sales              127,000              127,000 Jul Sales              105,000              195,000                          -                300,000 Aug Sales                         -                112,000              208,000              320,000 Sep Sales                          -                108,500              108,500 Total cash Collections              232,000              307,000              316,500              855,500 Answer 2-a. Merchandise Purchase Budget Jul Aug Sep Total Cost of Goods Sold - 60% of Sales              180,000              192,000              186,000              558,000 Add: Closing Inventory - 25%                48,000                46,500                 49,500                49,500 Total Needs              228,000              238,500              235,500              607,500 Less: opening Inventory              (45,000)              (48,000)              (46,500)              (45,000) Required Purchases              183,000              190,500              189,000              562,500 Answer 2-b Schedule of Cash payments to Suppliers Jul Aug Sep Total Cash Payment Accounts Payable - June                80,000                80,000 Jul Purchases                73,200              109,800              183,000 Aug Purchases                76,200              114,300              190,500 Sep Purchases                 75,600                75,600 Total Cash Payment to Suppliers              153,200              186,000              189,900              529,100 Answer 3. Cash budget Jul Aug Sep Total Opening cash Balance                93,000              121,800              192,800                93,000 Add: receipts Collection from Customers              232,000              307,000              316,500              855,500 Total Cash available              325,000              428,800              509,300              948,500 Less: Disbursements Cash Disbursement - Accounts Payable              153,200              186,000              189,900              529,100 Selling & Admn. Exp. ($56,000 - $6,000)                50,000                50,000                 50,000              150,000 Total Disbursement              203,200              236,000              239,900              679,100 Cash Balance Closing              121,800              192,800              269,400              269,400 Income Statement For the Qtr Ending Sep 30 Sales              930,000 Less: Cost of Goods Sold - 60% of Sales              558,000 Gross Profit              372,000 Less: Selling & Admn. Exp. Other - $50,000 X 3 Months              150,000 Depreciation - $6,000 X 3 Months                18,000 Operating Profit              204,000 Answer 4. Balance Sheet As on Sep 30 Assets Current Assets Cash              269,400 Accounts receivables              201,500 Inventory                49,500              520,400 Fixed Assets Property & Equipment              219,000 Less: Dep.                18,000              201,000 Total Assets              721,400 Liabilities Accounts Payable              113,400 Total liabilities              113,400 Shareholders's Equity Common Stock              330,000 Retained Earnings              278,000 Total Stockholders equity              608,000 Total liabilities & Stockholders' Equity              721,400                          -   Schedule of Retained Earnings As on Sep 30 Opening Balance                74,000 Add: net income              204,000 Less: Dividend declared                          -   Closing Balance              278,000

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