Question

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 $ 96,000 139,000 70,200 228,000 $ 533,200 $ 89,000 333,000 111,200 $ 533,200 Exercise 8-12 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% 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 60% of sales. The comnamunave for an ofite marchandienarchicae in the month of the purchaea and the remaininn 60 in the month followinn an 3 Nevt

Answer 1

Schedule of Expected Cash Collections Particulars July August September Quarter From Accounts receivable $139,000 $139,000 From July sales $136,500 $253,500 $390,000|(390.000*35%:65% From August sales $143,500 $266,500 $410,000|(410,000*35%:65%) From September sales $140,000 $140,000 (400,000*35%) Total cash collections $275,500 $397,000 $406,500 $1,079,000 Income Statement Particulars Sales Cost of goods sold Gross profit Selling and administrative expense Net operating income Interest expense Net income (loss) Amount 1200000|(390000+410000+400000) $720.000|(1.200.000*60%) $480.000 S162.000 (54000*3) $318.000 September month balance account receivable is $260,000 (400,000*65%) $318.000 12 2-a) Merchandise Purchase Budget Particulars | July August September Budgeted cost of goods sold $234.000 $246,000 $240,000 15 Add: Desired ending merchandise inventory $73,800 $72.000 $75,600 Total needs $307,800 $318,000 $315,600 17 Less Beginning merchandise inventory $70,200 $73,800 $72,000 Required purchased $237,600 $244,200 $243,600 Total $720,000 $75,600 $941,400 $70,200 $725,400 Balance sheet october Assets $252,000 (60% of sales) Cash Account receivable Inventory Plant and Equipment.net Total Assets Amount $365,760|(96000+1079000-668240-47000*3) $260.000 $75,600 $207,000 (228,000-7000*3) $908,360 Schedule of Cash Disbursement for purchases Particulars July August September 2-b) From Accounts payable $89,000 From July purchases $95,040 $142,560 From august purchases $97.680 $146,520 From September purchases $97,440 total cash disbursements $184.040 $240,240 $243,960 Total $89,000 $237.600 (237.600*40%:60%) $244.200|(244,200*40%:60%) $97,440 (243,600*40%) $668,240 Liabilities and Stockholders Equity Accounts payable Capital Stock Retained earnings Total liabilities & Stockholder's Equity Amount $146.160 $333,000 $429,200 (318000+111200) $908,360 September month balance account payalbe is $146,160 (243,600*60%)

G H Sales Schedule of Expected Cash Collections | Particulars July August September From Accounts receivable 139000 From July sales =F5*35% =F5*65% From August sales =F6*35% =F6*65% From September sales =400000*35% Total cash collections =SUM(C4:C7) =SUMD4:07) =SUM(E4:E7) Quarter =SUM(C4:54) 390000 410000 =SUM(C7:E7) =SUM(F4-F7) (390.000*35%:65%) (410,000*35%:65%) (400,000*35%) Income Statement Particulars Amount =(390000+410000+400000) (390000+410000+400000) Cost of goods sold =K4*60% (1.200.000*60%) Gross profit =K4-K5 Selling and administrative expe=54000*3 (54000*3) Net operating income =K6-K7 Interest expense Net income (loss) =K8-K9 September month balance account receivable is $260,000 (400,000*65%) 60% of sales) 96000+1079000-668240-47000*3) 12 2-a) Merchandise Purchase Budget Particulars July August September Total october Budgeted cost of goods so =390000*60% =410000*60% -400000*60% =SUM(C14:E14) =420000*60% 15 Add: Desired ending merchandis =D14*30% =E14*30% =G14*30% =E15 Total needs =SUM(C14:C15) =SUM(D14:D15) =SUME 14:515) =SUM(C16:E16) Less: Beginning merchandise inve 70200 =C15 =D15 =C17 Required purchased =C16-C17 =D16-D17 =E16-E17 =SUM(C18:E18) Balance sheet Assets Amount Cash =96000+F8-F26-(47000*3) Account receivable 260000 Inventory =F15 Plant and Equipment.net =228000-21000 Total Assets =SUM(K14:K17) (228,000-7000*3) 2-b) Schedule of Cash Disbursement for purchases Particulars July August September Total From Accounts payable 89000 =SUM(C22:E22) From July purchases =C18*40% =C18*60% =SUM(C23-E23) (237,600*40%:60%) From august purchases =D18*40% =D18*60% =SUM(C24:E24) (244,200*40%:60%) From September purchase =E18*40% =SUM(C25-E25) (243,600*40%) total cash disbursements =SUM(C22:C25) =SUM(D22:D25) =SUM(E22:E25) =SUM(F22:F25) Liabilities and Stockholders Amount Accounts payable 146160 Capital Stock 333000 Retained earnings =K10+111200 Total liabilities & Stockholder' =SUM(K21:K23) 318000+111200) September month balance account payalbe is $146.160 (243,600*60%)