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 $$410,000,$$$430,000,$$$420,000,$ and $$440,000,$ 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 $20\%$ 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.

Monthly selling and administrative expenses are always $$58,000.$ Each month $$8,000$ of this total amount is depreciation expense and the remaining $$50,000$ 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:

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.

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

Prepare a balance sheet as of September $30.$