Exercise 8-12 (Modified) Beech Corporation is a merchandising company that is preparing a master budget for the month of July. The company's balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cesh... Accounts receivable. Inventory... Plant and equipment, net of depreciation, Total assets... $ 90,000 136.000 62,000 210,000 5498,000 Llabilities and Stockholders' Equity Accounts payable Common stock. Retained earnings. Total liabilities and stockholders' equity $ 71,100 327.000 99,900 $498.000 1. 2. Beech's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $210,000 and $230,000, respectively, All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sales. All of the accounts receivable at June 30 will be collected in July a. July credit sales b. Cash collections in July: From July sales $210,000 x From June sales (from balance sheet) Total cash collections C. Accounts receivable $210,000 x Each month's ending inventory must equal 30% of the cost of next month's sales. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchases. All of the accounts payable at June 30 will be paid in July. Inventory needed in July X 60% = 3. Inventory needed in Aug. x 60%