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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 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash Accounts receivable Inventory Plant and equipment, net of depreciation Total assets $ 95,000 142,000 54,000 225,000 $516,000 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 86,000 332,000 98,000 $516,000 Beech's managers have made the following additional assumptions and estimates 1. Estimated sales for July, August, September, and October will be $360,000, $380,000, $370,000, and $390,000, respectively 2. 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 3. Each month's ending inventory must equal 15% of the cost of next month's sales. The cost of goods sold is 60% of sales. The comDanv Davs for 30% of its merchandise Durchases in the month of the Durchase and the remainina 70%
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