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Please help me with these questions Exercise 8-12 (Algo) Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August,
Please help me with these questions
Exercise 8-12 (Algo) Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $370,000, $390,000, $380,000, and $400,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each months ending inventory must equal 30% of the cost of next month's sales. The cost of goods sold is 75% 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 purchase. All of the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $50,000. Each month $7,000 of this total amount is depreciation expense and the remaining $43,000 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. Required: 1. Prepare a schedule of expected cash collections for July, August. and September. 2a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30. 2b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August. and September. 3. Prepare an income statement that computes net operating income for the quarter ended September 30. 4. Prepare a balance sheet as of September 30. \f\fComplete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Reg 4 Prepare a schedule of expected cash collections for July, August, and September. Schedule of Expected Cash Collections Month Quarter July August September From accounts receivable $ 141,000 $ 141,000 From July sales 129,500 240,500 370,000 From August sales 136,500 253,500 390,000 From September sales 133,000 133,000 $ $ Total cash collections 270,500 377,000 386,500 1,034,000 \fComplete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 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 $ 222,000 x $ 234,000 x $ 228,000 X $ 684,000 X Add: Desired ending merchandise inventory 70,200 X 68,400 X 120,000 X 120,000 x Total needs 292,200 X 302,400 X 348,000 X 804,000 X Less: Beginning merchandise inventory 83,250 70,200 X 68,400 X 83,250 Required purchases $ 208,950 X $ 232,200 X $ 279,600 X $ 720, 750 X \fStep by Step Solution
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