Question

Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO7-2, LO7-4, LO7-9, LO7-10] 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 $95,000 142,000 54,000 225,000 Cash Accounts receivable Inventory Plant and equipment, net of depreciation Total assets 516,000 Liabilities and Stockholders' Equity $86,000 332,000 98,000 Accounts payable Common stock Retained earnings $516,000 Total liabilities and stockholders' equity

Answer 1

		Schedule of Expected Cash Collections
					July	August	September	Quarter
From Accounts receivable					142,000			142,000
From July sales		(360,000*35%;65%)			126000	234000		360000
From August sales		(380,000*35%;65%)				133000	247000	380000
From September sales		(370,000*35%)					129500	129500
Total cash collections					268,000	367000	376500	1,011,500
			Accounts receivable 370,000*65%=				240500
2-a)		Merchandise Purchase Budget
					July	August	September	Total
Budgeted cost of goods sold			(60% of sales)		216000	228000	222000	666000
Add:Desired ending merchandise inventory					57000	55500	58500	58500
total needs					273000	283500	280500	724500
less: Beginning merchandise inventory					54,000	57000	55500	54,000
Required purchased					219,000	226500	225000	670,500
2-b)		Schedule of Cash Disbursement for purchases
					July	August	September	Total
From Accounts payable					86,000			86,000
From July purchases					87600	131400		219000
From august purchases						90600	135900	226500
From September purchases							90000	90000
total cash disbursements					173,600	222000	225900	621,500
		Accounts payable		225000*60%		135000
3)		Income Statement
	Sales						1110000
	cost of goods sold						666000
	Gross profit						444000
	Selling and administrative expense				(48000*3)		144000
	net operating income						300000
	interest expense						0
	net income (loss)						300000
4)		Balance sheet
	Assets
	Cash						362,000
	Account receivable						240500
	inventory						58500
	Plant and Equipment,net						204000
	Total Assets						865000
	Liabilities and Stockholders Equity
	Accounts payable						135000
	Capital Stock						332,000
	Retained earnings		(81,750+130,500)				398000
	Total liabilities & Stockholder's Equity						865000