Required Informetlon The following Information applies to the questions displaye

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Required Informetlon 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 3e AssetS Cash Accounts receivable Inventory Plant and equipment, Total assets $ 94,88 145,808 59,488 222,88e S 528,488 net of depreciation Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity 83,880 331,880 186,488 S 528,486 Beech's managers have made the following additional assumptions and estimates 1. Estimated sales for July, August, September, and October will be $330,000, $350,000, $340,000, and $360,000, respectively 2 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 recelvable at June 30 will be collected In July 3. 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 pald In July and the remalning $36,000 relates to expenses that are pald In the month they are Incurred. does not plan to issue any common stock or repurchase Its own stock during the quarter ended September 30. 4. Monthly selling and administrative expenses are always $42,000. Each month $6,000 of this total amount is depreclation expense 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company Requlred 1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30 2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30 2-b. 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. 3. Prepare an Income statement for the quarter ended September 30. 4. Prepare a balance sheet as of September 30

Explanation / Answer

Schedule of expected cash collections Month Quarter($) July August September From Accounts Recievable 145000 145000 From July Sales 115500 214500 330000 From August sales 122500 227500 350000 From Septembr sales 119000 119000 Total cash collections 260500 337000 346500 944000 Merchandise Purchases Budget July August September Qtr 261000 261000 271200 271200 268800 268800 Total needs 261000 271200 268800 801000 Required Purchases 201600 208200 207600 617400 Schedule for cash disbursement for purchases July August September Qtr From Accounts Payable 83000 83000 From July Purchases 80640 118600 199240 From August Purchases 83280 124920 208200 From September Purchases 83040 83040 Total cash rimbursements 163640 201880 207960 573480 Beach Corporation Income Statement For the quarter ended september 30 Sales 1020000 Less Cost of goods sold 612000 Less Selling And administration expenses 108000 Less depreciation 18000 Net Income 282000

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