Schedules of Expected Cash Collections and Disbursements

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 $ 90,000

Accounts Receivable 136,000

Inventory 62,000

Plant and equipment, net of depreciation 210,000

Total assets $498,000

Liabilities and Stockholder's Equity

Accounts Payable $ 71,100

Common Stock 327,000

Retained Earnings 99,900

Total Liabilities and Stockholders Equity $498,000

Beech's managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September and October will be $210,000, $230,000, $220,000 and $240,000, 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 month's ending inventory must equal 35% 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 purchase. All of the accounts payable at June 30 will be paid in July.

4. Monthly selling and administrative expenses are always $60,000. Each month $5,000 of this total amount is depreciation expense and the remaining $55,000 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: Use the template provided, save it to your desktop and then upload and submit your assignment.

1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.

2. a. Prepare a merchandise purchases budget for July, August, and September. Also, compute total merchandise purchases for the quarter ended September 30.

b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.

3. Prepare an income statement for the quarter ended September 30. Use the absorption format.

4. Prepare a balance sheet as of September 30.

1. Schedule of expected cash collections.

	July	August	September	Quarter

2a. Merchandise purchases budget

	July	August	September	Quarter

2b. Schedule of cash disbursements for purchases

	July	August	September	Quarter

3. Beech Corporation

Income Statement

For the Quarter Ended September 30

4.BeechCorporation

Balance Sheet

September 30