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 $ 90,000 136,000 62,000 210,000 $498,000 $ 71,100 327,000 99,900 $498,000

Answer 1

1) Schedule of Expected Cash Collections Months August July $136.000 September Quarter $136.000 $73,500 $73,500 $136,500 $136,500 From accounts receivable From July sales: 35% * $210.000 65% * $210.000 From August sales 35% * $230,000 65% * $230,000 From September sales: 35% * $220,000 Total cash collections $80,500 $80,500 $149,500 $149.500 $77,000 $77,000 $226,500 $653,000 $209,500 $217,000 2-a) Merchandise Purchases Budget July $126,000 August September Total $138,000 $132,000 $396,000 Budgeted cost of goods sold (60% of sales) Add: desired Ending merchandise inventory Total needs Less : Beginning merchandise inventory Required purchases $41.400 $167,400 $62,000 $105,400 $39.600 $177,600 $41.400 $136,200 $43,200 $124.200 $175,200 $520,200 $39.600 $143.000 $135,600 $377,200 Workings: Ending merchandise inventory At July 31 ($138.000 * 30%) At August 31 ($132,000 * 30%) At September 30 ($240,000 * 60% * 30%) $41.400 $39.600 $43.200 2-b) Schedule of cash disbursements for purchases: July $71.100 $42.160 From accounts payable From July purchases For August purchases For September purchases Total cash disbursements August September Total $71.100 $63,240 $105.400 $54,480 $81,720 $136,200 $54,240 $54,240 $117.720 $135.960 $366,940 $113,260 3) Beech Corporation Income Statement For the Quarter Ended September 30 Sales ($210,000+ $230,000+ $220,000) Less: Cost of goods sold Gross Margin Less: Selling and administrative expenses ($60.000 * 3) Net Income $660.000 $396.000 $264.000 $180.000 $84,000 Beech Corporation Balance Sheet September 30 Assets Cash [$90,000 + $653,000 - $366.940 - ($55,000 * 3)] Accounts receivable ($220,000 * 65%) Inventory Plant and equipment, net [210.000 - ($5,000 * 3)] Total assets Liabilities and Stockholders' Equity Accounts payable ($135,600 * 60%) Common stock Retained earnings ($99.900 + $84.000) Total liabilities and stockholders' equity $211,060 $143.000 $43,200 $195,000 $592,260 $81,360 $327,000 $183.900 $592,260