Required information

[The following information applies to the questions displayed below.]

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
Balance Sheet
June 30
Assets
Cash	$	73,000
Accounts receivable		125,000
Inventory		56,000
Plant and equipment, net of depreciation		221,000
Total assets	$	475,000
Liabilities and Stockholders Equity
Accounts payable	$	82,000
Common stock		309,000
Retained earnings		84,000
Total liabilities and stockholders equity	$	475,000

Beechs managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $320,000, $340,000, $330,000, and $350,000, respectively.

2. All sales are on credit and all credit sales are collected. Each months 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 25% of the cost of next months sales. The cost of goods sold is 70% 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 $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 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.

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.

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.

Required information

[The following information applies to the questions displayed below.]

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
Balance Sheet
June 30
Assets
Cash	$	73,000
Accounts receivable		125,000
Inventory		56,000
Plant and equipment, net of depreciation		221,000
Total assets	$	475,000
Liabilities and Stockholders Equity
Accounts payable	$	82,000
Common stock		309,000
Retained earnings		84,000
Total liabilities and stockholders equity	$	475,000

Beechs managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $320,000, $340,000, $330,000, and $350,000, respectively.

2. All sales are on credit and all credit sales are collected. Each months 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 25% of the cost of next months sales. The cost of goods sold is 70% 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 $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 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.

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.

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.

Required:

1. 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.

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.

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	$0
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity	$0

1. Calculate the expected cash collections for December.

2. Calculate the expected cash disbursements for merchandise purchases for December.

Total cash collections
Total cash disbursements

Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.

Ashton Company
Cash Budget
For the Month of December
Beginning cash balance
Add collections from customers
Total cash available		0
Less cash disbursements:
Payments to suppliers for inventory
Selling and administrative expenses
New web server
Dividends paid
Total cash disbursements		0
Excess (deficiency) of cash available over disbursements		0
Financing:
Borrowings
Repayments
Interest
Total financing		0
Ending cash balance		$0