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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

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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 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 $ 72,000 128,000 60,900 218.000 $ 478,900 $ 79,000 308,000 91,900 $ 478.900 Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $290,000 $310,000, $300,000, and $320,000, 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 20% 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 4. Monthly selling and administrative expenses are always $54.000. Each month $5,000 of this total amount is depreciation expense and the remaining $49,000 relates to expenses that are paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended Setember 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. Also compute total cash collections for the quarter ended September 30. 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. Also compute total cach dichureements for merchandise nurchases for the unter ander Sentember 20 Required: 1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30, 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. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30, 3. Prepare an income statement for the quarter ended September 30. 4. Prepare a balance sheet as of September 30. Reg 1 Reg 2A Req 2B Reg 3 Reg 4 Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for t quarter ended September 30. July Quarter $ 128,000 Schedule of Expected Cash Collections Month August September $ From accounts receivable 128,000 From July sales 130,500 159,500 From August sales 139,500 170,500 From September sales 135,000 $ $ Total cash collections $ 305,500 258,500 299,000 290,000 310,000 135,000 $ 863,000 Reg 1 Req 2A Reg 2B Reg 3 Reg 4 Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30. Merchandise Purchases Budget July August September Quarter Budgeted cost of goods sold $ 290,000 $ 310,000 $ 300,000 $ 900,000 Add: Desired ending merchandise inventory 203,000 217.000 210,000 X 630,000 Total needs 43,400 42,000 44.800 X 44,800 60.900 43,400 42,000 60,900 Required purchases $ 185,500 $ 215,600 $ 212.800 $ 613,900 Reg 1 Reg 2A Reg 2B Req3 Reg 4 Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30, Schedule of Cash Disbursements for Purchases July August September Quarter From accounts payable $ 79,000 $ 79,000 From July purchases 55,650 129,850 185,500 From August purchases 64,680 150,920 215,600 From September purchases 63,840 63,840 $ Total cash disbursements $ 214,760 $ 543,940 134,650 194,530 $ Reg 1 Req 2A Reg 2B Reg 1 Reg 4 Prepare an income statement for the quarter ended September 30. Beech Corporation Income Statement For the Quarter Ended September 30 Sales $ 900,000 Cost of goods sold 630,000 Gross margin 270,000 Selling and administrative 162,000 expenses Net operating income 108,000 Interest expense Net loss X $ 108,000 Prepare a balance sheet as of September 30. Beech Corporation Balance Sheet September 30 Assets Cash Accounts receivable Inventory Plant and equipment, net $ 0 Total assets Liabilities and Stockholders' Equity Accounts payable Common stock

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