### Beech Corporation Balance Sheet Overview**Beech Corporation** is preparing a master budget for the third quarter of the year. Below is the balance sheet as of June 30:#### Balance Sheet as of 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 Stockholders’ Equity:**- **Accounts Payable:** $71,100- **Common Stock:** $327,000- **Retained Earnings:** $99,900**Total Liabilities and Stockholders’ Equity:** $498,000### Additional Assumptions and EstimatesBeech’s managers have made the following assumptions for budget preparation:1. **Estimated Sales:** - July: $210,000 - August: $230,000 - September: $220,000 - October: $240,0002. **Sales Collection:** - All sales are credit-based. - Collections: 35% in the month of sale and 65% in the following month. - Accounts receivable as of June 30 will be collected in July.3. **Inventory and Purchases:** - Ending inventory = 30% of the cost of next month’s sales. - Cost of goods sold = 60% of sales. - Payment for merchandise: 40% in the month of purchase, remaining 60% the following month. - Accounts payable at June 30 will be paid in July.4. **Monthly Expenses:** - Selling and administrative expenses: $60,000. - Includes $5,000 depreciation. - Other expenses are paid in the month incurred.5. **Financing and Stock Policy:** - No borrowing, dividend payments, or stock issuance/repurchase planned for the quarter ending September 30. **Question 3: Financial Planning and Budgeting Task****Required Information:**The task requires completion of the following:1. **Cash Collections Schedule:** Prepare a schedule of expected cash collections for the months of July, August, and September.2. **Merchandise Purchases Budget:** - **2-a:** Create a merchandise purchases budget for July, August, and September. Also calculate the total merchandise purchases for the quarter ending September 30. - **2-b:** Develop a schedule of expected cash disbursements for merchandise purchases during July, August, and September.3. **Income Statement Preparation:** Formulate an income statement that calculates the net operating income for the quarter ending September 30.4. **Balance Sheet Preparation:** Compile a balance sheet as of September 30.**Instructions:**Complete this task by entering your answers in the provided tabs below.**Detailed Schedule Explanation:**- **Schedule of Expected Cash Collections:** - **Columns:** The table is divided into columns labeled "Month" with subheadings for July, August, and September, concluding with a "Quarter" column. - **Rows:** Include: - From July sales - From August sales - From September sales - Total cash collectionsThe table layout is ready for input, with each month's cash collections detailed, and the quarter's total awaiting calculation.**Navigation Options:**- **Tabs for each requirement:** Req 1, Req 2A, Req 2B, Req 3, Req 4- Buttons to move between tasks: “Prev,” “Next”This task is presented on an educational platform, McGraw Hill, providing a structured approach to understanding and preparing essential financial documents.

Solution 1: Schedule of expected cash collection - Beech Corporation Particulars July…

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 $ 90,000 136,000 62,000 210,000 Cash Accounts receivable Inventory Plant and equipment, net of depreciation Total assets $498,000 Liabilities and Stockholders' Equity Accounts payable $ 71,100 327,000 99,900 Common stock Retained earnings $498,000 Total liabilities and stockholders' equity ech's managers have made the following additional assumptions and estimates: . Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively. . 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. E. 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 followim the purchase. All of the accounts payable at June 30 will be paid in July. 1. Monthly selling and administrative expenses are always $60,000. Each month $5,000 of this total amount is depreciation exper 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 compar its own stock during the quarter ended September 30.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q