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's managers have made the following additional assumptions and estimates:
1. Estimated sales for July. August, September, and October will be $210,000, $230.000, $220,000, and $240,000, respectively. 2. 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.
3. 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.
4. 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.
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.
Solution 1:
Schedule of expected cash collection - Beech Corporation | ||||
Particulars | July | August | September | Total |
Accounts Receivables from June | $136,000.00 | $136,000.00 | ||
Cash received for July Sale | $94,500.00 | $115,500.00 | $210,000.00 | |
Cash received for August Sale | $103,500.00 | $126,500.00 | $230,000.00 | |
Cash received for September Sale | $99,000.00 | $99,000.00 | ||
Budgeted Cash Collection | $230,500.00 | $219,000.00 | $225,500.00 | $675,000.00 |
Solution 2:
Material Purchase Budget - Beech Corporation | ||||
Particulars | July | August | September | Total |
Budgeted Cost of goods sold | $126,000.00 | $138,000.00 | $132,000.00 | $396,000.00 |
Add: Desired ending merchandise inventory | $27,600.00 | $26,400.00 | $28,800.00 | $28,800.00 |
Total Needs | $153,600.00 | $164,400.00 | $160,800.00 | $424,800.00 |
Less: Opening Inventory | $62,000.00 | $27,600.00 | $26,400.00 | $62,000.00 |
Required purchases | $91,600.00 | $136,800.00 | $134,400.00 | $362,800.00 |
Schedule of expected cash disbursement for merchandise purchases - Beech Corporation | ||||
Particulars | July | August | September | Total |
Payables from June | $71,100.00 | $71,100.00 | ||
July Purchases | $27,480.00 | $64,120.00 | $91,600.00 | |
August Purchases | $41,040.00 | $95,760.00 | $136,800.00 | |
September Purchases | $40,320.00 | $40,320.00 | ||
Total payments in month | $98,580.00 | $105,160.00 | $136,080.00 | $339,820.00 |
Solution 3:
Income Statement - Beech Corporation | |
For Quarter Ended - September 30 | |
Particulars | Amount |
Sales | $660,000.00 |
Cost of Sales | $396,000.00 |
Gross Profit | $264,000.00 |
Operating Expenses: | |
Selling and administrative expenses | $180,000.00 |
Net Income | $84,000.00 |
Solution 4:
Balance Sheet- Beech Corporation | |
30-Sep | |
Particulars | Amount |
Assets: | |
Cash ($90,000 + $675,000 - $339,820 - $165,000 | $260,180.00 |
Accounts receivables ($220,000*55%) | $121,000.00 |
Inventory | $28,800.00 |
Plant and equipment net of depreciation ($210,000 - $15,000) | $195,000.00 |
Total Assets | $604,980.00 |
Liabilities and stockholder's Equity: | |
Accounts payable ($134,400*70%) | $94,080.00 |
Common Stock | $327,000.00 |
Retained Earnings ($99,900 + $84,000) | $183,900.00 |
Total liabilities and stockholders equity | $604,980.00 |
Beech Corporation Is a merchandising company that Is preparing a master budget for the third quarter of t...
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 30 Cash Accounts receivable Inventory Plant and equipment, net of depreciation Total assets $ 85,000 141,000 83,250 226,000 s535,250 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings s 87,000 350,000 98,250 Total liabilities and stockholders equity s 535,250 Exercise 8-12 Beech's managers have...
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 Cash Beech Corporation Balance Sheet June 30 Assets $ 90.000 Accounts receivable 136.000 Inventory 62,000 Plant and equipment, net of 210,000 depreciation Total assets $498,000 Liabilities and Stockholders' Equity Accounts payable $ 71,100 Common stock 327,000 Retained earnings 99,900 Total Ilabilities and $498,000 stockholders' equity Beech's managers have made...
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 $ 86,000 Accounts receivable 138,000 Inventory 75,000 Plant and equipment, net of depreciation 229,000 Total assets $ 528,000 Liabilities and Stockholders’ Equity Accounts payable $ 90,000 Common stock 351,000 Retained earnings 87,000 Total liabilities and stockholders’ equity $ 528,000 Beech’s managers...
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 $ 82,000 Accounts receivable 129,000 Inventory 52,500 Plant and equipment, net of depreciation 217,000 Total assets $ 480,500 Liabilities and Stockholders’ Equity Accounts payable $ 78,000 Common stock 347,000 Retained earnings 55,500 Total liabilities and stockholders’ equity $ 480,500 Beech’s managers...
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 $ 84,000 Accounts receivable 144,000 Inventory 63,750 Plant and equipment, net of depreciation 223,000 Total assets $ 514,750 Liabilities and Stockholders’ Equity Accounts payable $ 84,000 Common stock 349,000 Retained earnings 81,750 Total liabilities and stockholders’ equity $ 514,750 Beech’s managers...
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 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 72,000 128,000 60,900 218,000 $ 478,900 $ 79,000 308,000 91,900 $ 478,900 Beech's managers...
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 $ 74,000 Accounts receivable 143,000 Inventory 73,500 Plant and equipment, net of depreciation 224,000 Total assets $ 514,500 Liabilities and Stockholders’ Equity Accounts payable $ 85,000 Common stock 310,000 Retained earnings 119,500 Total liabilities and stockholders’ equity $ 514,500 Exercise 8-12...
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 $ 86,000 Accounts receivable 138,000 Inventory 75,000 Plant and equipment, net of depreciation 229,000 Total assets $ 528,000 Liabilities and Stockholders’ Equity Accounts payable $ 90,000 Common stock 351,000 Retained earnings 87,000 Total liabilities and stockholders’ equity $ 528,000 Beech’s managers...
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 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 90,00 136,000 52.000 210,000 5498.000 $71.100 327.ee 99,900 $498,000 Beech's managers have made the...
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 $ 90,000 Accounts receivable 136,000 Inventory 62,000 Plant and equipment, net of depreciation 210,000 Total assets $ 498,000 Liabilities and Stockholders’ Equity Accounts payable $ 71,100 Common stock 327,000 Retained earnings 99,900 Total liabilities and stockholders’ equity $ 498,000 Beech’s managers...