Question

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 $ 85,000 141,000 83,250 226,000 $ 535,250 $ 87,000 350,000 98,250 $ 535,250 Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $370.000, $390,000 $380,000, and $400,000, 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% in the month following the sale. All of the accounts receivable at June 30 will be collected in July 3. Each month's ending inventory must equal 30% of the cost of next month's sales. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the muhase All of the accounts payable at June 30 will be paid in July

i got requirement 1 correct so that answer is not needed. only 2A-B, 3 & 4

thank you

Answer 1

Answer to Part 1. September Beech Corporation Sechedule of Expected Cash Collections July August 141000 129500 240500 136500 From Accounts Receivable From July Sales From August Sales From September Sales Total Cash Collections Quarter 141000 370000 390000 133000 1 034000 253500 133000 386500 270500 377000 Answer to Part 2-a. July Budgeted Cost of Goods Sold Add: Desired Ending Inventory Total Needs Less: Beginning Inventory Budgeted Purchases Beech Corporation Merchandise Purchase Budget August 277500 292500 87750 85500 365250 378000 83250 87750 282000 | 290250 September 285000 90000 375000 85500 289500 Quarter 855000 90000 945000 83250 861750 Answer to Part 2-b. Beech Corporation Sechedule of Expected Cash Disbursements - Merchandise Purchases July August September From Accounts Payable 87000 From July Purchases 112800 169 200 From August Purchases 116100 174150 From September Purchases 115800 Total Cash Disbursements 199800 285300 289950 Quarter 87000 282000 290250 115800 775050

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 1140000 855000 285000 150000 135000 135000

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 214950 247000 90000 205000 756950 173 700 350000 233250 756950 Cash, Ending = Beginning Cash Balance + Cash Receipts - Cash Disbursements for Purchases - cash disbursements for Selling and Administrative Expenses Cash, Ending = $85,000+ $1,034,000 - $775,050 - ($43,000 * 3) Cash, Ending = $ 214,950 Plant and Equipment, Net = Beginning plant and Equipment - Depreciation Plant and Equipment, Net = $226,000 - ($7,000 * 3) Plant and Equipment, Net = $205,000