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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
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 th is shown below:
Beech Corporation
Balance Sheet
June
::
Assets
Cash
Accounts receivable
Inventony
Plant and equipment, net of depreciation
Total assets
Liabilities and Stockholders Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders equity
$
$
$
$
Beech's managers have made the following additional assumptions and estimates:
Estimated sales for July, August, September, and October will be $ $ $ and $ respectively.
All sales are on credit and all credit sales are collected. Each month's credit sales are collected in the month of sale and in the month following the sale. All of the accounts receivable at June will be collected in July.
Each month's ending inventory must equal of the cost of next month's sales. The cost of goods sold is of sales. The company pays for of its merchandise purchases in the month of the purchase and the remaining in the month following the purchase. All of the accounts payable at June will be paid in July
Monthly selling and administrative expenses are always $ Each month $ of this total amount is depreciation expense and the remaining $ 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 The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September Required:
Prepare a schedule of expected cash collections for July, August, and September.
a Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September
b Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.
Prepare an income statement that computes net operating income for the quarter ended September
Prepare a balance sheet as of September
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