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 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 $ 75,000 140,000 66,500 227,000 $ 508,500 $ 88,000 311,000 109,500 $ 508,500 Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $380,000, $400,000, $390,000, and $410,000, 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 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 $52,000. Each month $7,000 of this total amount is depreciation expense and the remaining $45,000 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 September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30. Req 1 Req 2A Req 2B Req3 Req 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 Budgeted cost of goods sold $ 266,000 $ 280,000 Add: Desired ending merchandise inventory September $ 273,000 Quarter $ 819,000 Total needs (66,500) (66,500) Less: Beginning merchandise inventory Required purchases Req 1 Req 2A Req 2B Req 3 Req 4 Prepare an income statement for the quarter ended September 30. Beech Corporation Income Statement For the Quarter Ended September 30 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income Req 1 Req 2A Req 2B Req 3 Req 4 Prepare a balance sheet as of September 30. Beech Corporation Balance Sheet September 30 Assets Cash Accounts receivable Inventory Plant and equipment, net Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity