Question

Required information Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet (LO8-2, LO8-4, LO8-9, LO8-10) [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 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 $ 82,000 129,000 52,500 217,000 $ 480,500 $ 78,000 347,000 55,500 $ 480,500

Answer 1

Beech Corporation:
Req 1:
Preparation of schedule of expected cash collections for July, August, and September
Schedules of Expected Cash Collections:
	Month
	July	August	September	Quarter
				$
Proceeds from Accounts receivable as on June 30th	129000	0	0	129000
From July Sales	98000	182000		280000
From August Sales	0	105000	195000	300000
From September Sales			101500	101500
Total Cash Collections	227000	287000	296500	810500
Req 2A:
Merchandise Purchases Budget:	July	August	September	Quarter
Cost of goods sold- 75% on sales	210000	225000	217500	652500
Ending Inventory- 25% of next month sales	75000	72500	77500	225000
Total Needs	285000	297500	295000	877500
Less: Opening Inventory	52500	75000	72500	200000
Required Purchases	232500	222500	222500	677500
Req 2B:
Schedule of Cash disbursements for Purchases:
	July	August	September	Quarter
Amount paid for Accounts payable as on June 30	78000	0	0	78000
From July Purchases	93000	139500		232500
From August Purchases		89000	133500	222500
From September Purchases			89000	89000
Total Cash disbursements	171000	228500	222500	622000
Req 3:
Beech Corporation:
Income Statement
For the quarter ended September 30
Sales for the Quarter	870000
Less: Purchases	677500
	192500
Less: Opening Inventory	52500
	140000
Add: Closing Inventory	77500
Gross Profit	217500
Less: Selling, Admininistrative expenses incl dep	156000
Net Profit before tax	61500
Req 4:
Beech Corporation:
Balance sheet
September 30
Assets:
Cash	129500	Opening Cash Balance		82000
Accounts Receivable	188500	Add: Cash collections during the
Inventory	77500	quarter		810500
Plant and equipment, net of depreciation	202000	Less: Cash disbursements
Total Assets	597500	for purchases		622000
		Less: Payments for Selling
Liabilities and Stockholder's Equity:		expenses		141000
		Closing Cash Balance		129500
Accounts Payable	133500
Common stock	347000
Retained Earnings	117000
Total Liabilities and Stockholder's Equity:	597500