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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 Sbeet June 30 Assets Cash Accounts receivable Inventory 96,000 139, 000 70,200 228,000 Lant and equipment, net of depreciation Total assets S 533,200 Liabilities and Stockholders Equity Accounts payable Conmon stoek $ 89,000 333,000 111,200 533,200 Total liabilities and stockholders equity Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $390,000, $410,000, $400,000, and $420,000, 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% 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 4. Monthly selling and administrative expenses are always $54,000. Each month $7,000 of this total amount is depreciation expense 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 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. and the remaining $47,000 relates to expenses that are paid 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.

Answer 1

Schedule of cash collection
	July	Aug	Sept	Quarter
Sales	3,90,000	4,10,000	4,00,000	12,00,000
From accounts receivable	1,39,000			1,39,000
from july sales	1,75,500	2,14,500		3,90,000
from august sales		1,84,500	2,25,500	4,10,000
from september sales			1,80,000	1,80,000
total cash collections	3,14,500	3,99,000	4,05,500	11,19,000

Merchandise purchase budget
	july	Aug	Sept	Quarter
cost of goods sold @ 60%of Sales	2,34,000	2,46,000	2,40,000	7,20,000
Ending inventory (20% of next Month COGS)	49,200	48,000	50,400	50,400
Total needs	2,83,200	2,94,000	2,90,400	7,70,400
Less: Beginning merchandise inventory	70,200	49,200	48,000	70,200
Required purchases	2,13,000	2,44,800	2,42,400	7,00,200
Sept , Endding Inventory:= October sales X 60%X 20%

Schedule of cash disbursement
	july	Aug	Sept	Quarter
From accounts payable	89,000			89,000
from july purchase	63,900	1,49,100		2,13,000
from August purchase		73,440	1,71,360	2,44,800
From september purchase			72,720	72,720
total cash disbursements	1,52,900	2,22,540	2,44,080	6,19,520

income statement
sales		12,00,000
Less: cost of goods sold		7,20,000
Gross margin		4,80,000
Less: Selling and administrative expense (54000*3)		1,62,000
net operating income		3,18,000
interest expense		-
net income		3,18,000

Balance sheet
Assets
Cash		4,54,480
Account receivable (400000*55%)		220000
inventory		50,400
plant and Equipment ,net		2,07,000
(228000-21000 dep)
total assets		9,31,880
Liabilities & Stockholders Equity
Accounts payable (242400*70%)		169680
Common stock		3,33,000
Retained earnings (111200+318000)		429200
Total liabilities & stockholders equity		9,31,880

cash = opening + receipts - disbursement - selling expense (43000*3)

96000+1119000- 619520-(47000X3)=$4,54,480