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[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 इ96/०0० 139,000 70,200 228,000 Cash Accounts receivable Inventory Plant and equipment, net of depreciation $533 200 Total assets Liabilities and Stockholders Equity Accounts payable Common stock Retained earnings |৪9,000 333.000 i11/200 $533, 200 Total liabilities and stockholdersequity 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 35 % in the month of sale and 65%

Answer 1

Answer to Part 1. September Beech Corporation Sechedule of Expected Cash Collections July August 139000 136500 253500 143500 From Accounts Receivable From July Sales From August Sales From September Sales Total Cash Collections Quarter 139000 390000 410000 140000 1079000 266500 140000 406500 275500 397000 Answer to Part 2-a. Budgeted Cost of Goods Sold Add: Desired Ending Inventory Total Needs Less: Beginning Inventory Budgeted Purchases Beech Corporation Merchandise Purchase Budget July August 234000 246000 73800 72000 307800 318000 70200 73800 237600 244200 September 240000 75600 315600 72000 2 43600 Quarter 720000 75600 795600 70200 725400 Answer to Part 2-b. Beech Corporation Sechedule of Expected Cash Disbursements - Merchandise Purchases July August September From Accounts Payable 89000 From July Purchases 95040 142560 From August Purchases 97680 146520 From September Purchases 97440 Total Cash Disbursements 184040 / 240 240 243960 Quarter 89000 237600 244200 97440 668240

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 Interest Expense Net Income 1200000 720000 480000 162000 318000 318000

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 365 760 260000 75600 207000 908360 146160 333000 429200 908360 Cash, Ending = Beginning Cash Balance + Cash Receipts - Cash Disbursements for Purchases - cash disbursements for Selling and Administrative Expenses Cash, Ending = $96,000 + $1,079,000 - $668,240 - ($47,000 * 3) Cash, Ending = $365,760 Plant and Equipment, Net = Beginning Plant and Equipment - Depreciation Plant and Equipment, Net = $228,000 - ($7,000 * 3) Plant and Equipment, Net = $207,000