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 $ 81,000 132,000 56,250 214,000 S4183, 250 $ 25,000 346.069 62,250 $ 433,250

Answer 1

Answer to Part 1. Beech Corporation Sechedule of Expected Cash Collections July August 132,000 87,500 162,500 94,500 September From Accounts Receivable From July Sales From August Sales From September Sales Total Cash Collections Quarter 132,000 250,000 270,000 91,000 743,000 175,500 91,000 266,500 219,500 257,000 Budgeted Cost of Goods Sold Add: Desired Ending Inventory Total Needs Less: Beginning Inventory Budgeted Purchases Answer to Part 2-a. Beech Corporation Merchandise Purchase Budget July 187,500 60,750 248,250 56,250 192,000 August 202,500 58,500 261,000 60,750 200,250 September 195,000 63,000 258,000 58,500 199,500 Quarter 585,000 63,000 648,000 56,250 591,750 Desired Ending Inventory, September = $280,000 * 75% * 30% = $63,000

Answer to Part 2-b. Beech Corporation Sechedule of Expected Cash Disbursements - Merchandise Purchases July August September From Accounts Payable 75,000 From July Purchases 76,800 115,200 From August Purchases 80,100 120,150 From September Purchases 79,800 Total Cash Disbursements 151,800 195,300 199,950 Quarter 75,000 192,000 200,250 79,800 547,050

Answer to Part 3. Beech Corporation Income Statement For the Quarter Ended September 30 Sales Cost of Goods Sold Gross Margin Selling and Administrative Expenses Net Operating Income / (Loss) Interest Expense Net Income / (Loss) 780,000 585,000 195,000 138,000 57,000 57,000

Answer to Part 4 Beech Corporation Balance Sheet September 30 Assets Cash Accounts Receivable Inventory Plant and Equipment, Net Total Assets Liabilities and Stockholders' Equity Accounts Payable Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 153,950 169,000 63,000 199,000 584,950 119,700 346,000 119,250 584,950 Cash, Ending = Beginning Cash Balance + Cash Receipts - Cash Disbursements for Purchases - cash disbursements for Selling and Administrative Expenses Cash, Ending = $81,000 + $743,000 - $547,050 - ($41,000 * 3) Cash, Ending = $153,950 Plant and Equipment, Net = $214,000 - ($5,000 * 3) Plant and Equipment, Net = $199,000