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: Assets Cash Accounts receivable Inventory Beech Corporation Balance Sheet June 30 Plant and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 70,000 134,000 48,300 212,000 $ 464,300 $ 73,000 306,000 85,300 $ 464,300 Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $230,000, $250,000, $240,000, and $260,000, 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 30% of the cost of next month's 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 $42.000. Each month $7,000 of this total amount is depreciation expense and the remaining $35,000 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 ender September 20

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

Sh1

[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 company's balance sheet as of June 30th is shown below:
Assets
Cash
Accounts receivable
Inventory
Beech Corporation
Balance Sheet
June 30
Plant and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable.
Common stock
Retained earnings
Total liabilities and stockholders' equity
$ 70,000
134,000
48,300
212,000
$ 464,300
$ 73,000
306,000
85,300
$ 464,300
Beech's managers have made the following additional assumptions and estimates:
1. Estimated sales for July, August, September, and October will be $230,000, $250,000, $240,000, and $260,000, 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 30% of the cost of next month's 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 $42,000. Each month $7,000 of this total amount is depreciation expense
and the remaining $35,000 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.
Transcribed Image Text:[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 company's balance sheet as of June 30th is shown below: Assets Cash Accounts receivable Inventory Beech Corporation Balance Sheet June 30 Plant and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable. Common stock Retained earnings Total liabilities and stockholders' equity $ 70,000 134,000 48,300 212,000 $ 464,300 $ 73,000 306,000 85,300 $ 464,300 Beech's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $230,000, $250,000, $240,000, and $260,000, 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 30% of the cost of next month's 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 $42,000. Each month $7,000 of this total amount is depreciation expense and the remaining $35,000 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.
5:23
nces
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.
Complete this question by entering your answers in the tabs below.
Req 1
Req 3
Req 4
Prepare a schedule of expected cash collections for July, August, and September.
Schedule of Expected Cash Collections
Month
August
Req 2A
Req 28
From July sales
From August sales
From September sales
Total cash collections
July
$
0 $
September
0 $
Quarter
$
0 $
0
0
0
0
0
Transcribed Image Text:5:23 nces 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. Complete this question by entering your answers in the tabs below. Req 1 Req 3 Req 4 Prepare a schedule of expected cash collections for July, August, and September. Schedule of Expected Cash Collections Month August Req 2A Req 28 From July sales From August sales From September sales Total cash collections July $ 0 $ September 0 $ Quarter $ 0 $ 0 0 0 0 0
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education