Assets Cash Beech Corporation Balance Sheet June 30 Accounts receivable Inventory Plant and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock $ 72,000 128,000 60,900 218,000 $ 478,900 $ 79,000 308,000 91,900 Retained earnings Total liabilities and stockholders' equity $ 478,900 Exercise 8-13 (Algo) Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $290,000, $310,000, $300,000, and $320,000, respectively. 2. 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. 3. 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. 4. Monthly selling and administrative expenses are always $54,000. Each month $5,000 of this total amount is depreciation expense and the remaining $49,000 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.
Assets Cash Beech Corporation Balance Sheet June 30 Accounts receivable Inventory Plant and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock $ 72,000 128,000 60,900 218,000 $ 478,900 $ 79,000 308,000 91,900 Retained earnings Total liabilities and stockholders' equity $ 478,900 Exercise 8-13 (Algo) Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $290,000, $310,000, $300,000, and $320,000, respectively. 2. 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. 3. 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. 4. Monthly selling and administrative expenses are always $54,000. Each month $5,000 of this total amount is depreciation expense and the remaining $49,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Assets
Cash
Beech Corporation
Balance Sheet
June 30
Accounts receivable
Inventory
Plant and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
$ 72,000
128,000
60,900
218,000
$ 478,900
$ 79,000
308,000
91,900
Retained earnings
Total liabilities and stockholders' equity
$ 478,900
Exercise 8-13 (Algo)
Beech's managers have made the following additional assumptions and estimates:
1. Estimated sales for July, August, September, and October will be $290,000, $310,000, $300,000, and $320,000, respectively.
2. 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.
3. 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.
4. Monthly selling and administrative expenses are always $54,000. Each month $5,000 of this total amount is depreciation expense
and the remaining $49,000 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.
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