Question
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The companys balance sheet as
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The companys balance sheet as of June 30th is shown below: |
Beech Corporation Balance Sheet June 30 | ||||||||||||
Assets | ||||||||||||
Cash | $ 70,000 | |||||||||||
Accounts receivable | 134,000 | |||||||||||
Inventory | 48,300 | |||||||||||
Plant and equipment, net of depreciation | 212,000 | |||||||||||
Total assets | $ 464,300 | |||||||||||
Liabilities and Stockholders Equity | ||||||||||||
Accounts payable | $ 73,000 | |||||||||||
Common stock | 306,000 | |||||||||||
Retained earnings | 85,300 | |||||||||||
Total liabilities and stockholders equity | $ 464,300 | |||||||||||
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2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30 Answer is complete but not entirely correct Merchandise Purchases Budget July August September Total 161,000 175,000 168,000 504,000 Budgeted cost of goods sold 52,500 50,400 54,600 157,500 X Add: Desired ending merchandise inventory 213,500 225,400 222,600 661,500X Total needs (48,300) V (52,500) V (50,400) V (151,200)X Less: Beginning merchandise inventory 165,200 172,900 172,200 S 510,300 Required purchases
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