Question

Required information [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 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 91,000 133,000 36,000 213,000 $ 473,000 $ 74,000 328,000 71,000 $ 473,000 Beech's managers have made the following additional assumptions and estimates:

Answer 1

1.

Cash Collections budget
	July	August	September	Total
Collected in same month (35%)	$          84,000	$           91,000	$           87,500	$         262,500
Collected in following month (65%)	$       133,000	$         156,000	$         169,000	$         458,000
Total Cash Collections	$       217,000	$         247,000	$         256,500	$         720,500

2a.

Merchandise Purchase Budget
	July	August	September	Total
Sales	$       240,000	$         260,000	$         250,000	$         750,000
Cost of Goods Sold @60%	$       144,000	$         156,000	$         150,000	$         450,000
Add : Desired Ending Inventory	$          39,000	$           37,500	$           40,500	$           40,500
Total Needs	$       183,000	$         193,500	$         190,500	$         490,500
Less Beginning Inventory	$          36,000	$           39,000	$           37,500	$           36,000
Merchandise Purchase	$       147,000	$         154,500	$         153,000	$         454,500

2b.

Cash Payments budget
	July	August	September	Total
Paid in same month (40%)	$          58,800	$           61,800	$           61,200	$         181,800
Paid in following month (60%)	$          74,000	$           88,200	$           92,700	$         254,900
Total Cash Payments	$       132,800	$         150,000	$         153,900	$         436,700

3.

Income Statement
Sales Revenue	$       750,000
Cost of Goods Sold	$       450,000
Gross Profit	$       300,000
Selling and administrative expenses	$       108,000
Depreciation	$          24,000
Net Income	$       168,000

4.

Balance Sheet
Assets
Cash	$       266,800	=91000+720500-436700-36000*3
Accounts Receivable	$       162,500	=250000*65%
Inventory	$          40,500
Plant and Equipment, net	$       189,000	=213000-8000*3
Total Assets	$       658,800
Liabilities
Accounts Payables	$          91,800	=153000*60%
Common Stock	$       328,000
Retained Earnings	$       239,000	=71000+168000
Total Liabilities & Stockholder's Equity	$       658,800