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 $30$th is shown below:

Beech Corporation

Balance Sheet

June $30$

Assets

Cash $ $71,000$

Accounts receivable $131,000$

Inventory $45,500$

Plant and equipment, net of depreciation $215,000$

Total assets $ $462,500$

Liabilities and Stockholders$$ Equity

Accounts payable $ $76,000$

Common stock $307,000$

Retained earnings $79,500$

Total liabilities and stockholders$$ equity $ $462,500$

Exercise $8-13($Algo$)$

Beech$$s managers have made the following additional assumptions and estimates:

Estimated sales for July, August, September, and October will be $$260,000,$ $$280,000,$ $$270,000,$ and $$290,000,$ respectively.

All sales are on credit and all credit sales are collected. Each month$$s credit sales are collected $45\%$ in the month of sale and $55\%$ in the month following the sale. All of the accounts receivable at June $30$ will be collected in July.

For this quarter, each month$$s ending inventory must equal $15\%$ of the cost of next month$$s sales. The cost of goods sold is $70\%$ of sales. The company pays for $30\%$ of its merchandise purchases in the month of the purchase and the remaining $70\%$ in the month following the purchase. All of the accounts payable at June $30$ will be paid in July.

Monthly selling and administrative expenses are always $$48,000.$ Each month $$5,000$ of this total amount is depreciation expense and the remaining $$43,000$ relates to expenses that are paid in the month they are incurred.

The company does not plan to borrow money or pay or declare dividends during the quarter ended September $30.$ The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September $30.$

Required:

$1.$ Prepare a schedule of expected cash collections for July, August, and September.

$2-$a$.$ Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September $30.$

$2-$b$.$ Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.

$3.$ Prepare an income statement for the quarter ended September $30.$

$4.$ Prepare a balance sheet as of September $30.$