Required information Skip to question   [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:   Beech Corporation Balance Sheet June 30 Assets   Cash $ 76,000 Accounts receivable 137,000 Inventory 86,100 Plant and equipment, net of depreciation 230,000 Total assets $ 529,100 Liabilities and Stockholders’ Equity   Accounts payable $91,000 Common stock 312,000 Retained earnings 126,100 Total liabilities and stockholders’ equity $ 529,100   Beech’s managers have made the following additional assumptions and estimates:   Estimated sales for July, August, September, and October will be $410,000, $430,000, $420,000, and $440,000, 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. 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. Monthly selling and administrative expenses are always $58,000. Each month $8,000 of this total amount is depreciation expense and the remaining $50,000 relates to expenses that are paid in the month they are incurred. 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-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.

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

Required information

Skip to question

 

[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:

 

Beech Corporation
Balance Sheet
June 30
Assets  
Cash $ 76,000
Accounts receivable 137,000
Inventory 86,100
Plant and equipment, net of depreciation 230,000
Total assets $ 529,100
Liabilities and Stockholders’ Equity  
Accounts payable $91,000
Common stock 312,000
Retained earnings 126,100
Total liabilities and stockholders’ equity $ 529,100

 

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

 

  1. Estimated sales for July, August, September, and October will be $410,000, $430,000, $420,000, and $440,000, 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 $58,000. Each month $8,000 of this total amount is depreciation expense and the remaining $50,000 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-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
|▶▶
Req 1
Sales
Req 2A
Req 2B
Prepare an income statement that computes net operating income for the quarter ended September 30.
Beech Corporation
Income Statement
For the Quarter Ended September 30
Req 3
$
0
0
Req 4
< Req 2B
Req 4 >
Transcribed Image Text:Required information |▶▶ Req 1 Sales Req 2A Req 2B Prepare an income statement that computes net operating income for the quarter ended September 30. Beech Corporation Income Statement For the Quarter Ended September 30 Req 3 $ 0 0 Req 4 < Req 2B Req 4 >
Required information
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
From accounts payable
From July purchases
From August purchases
From September purchases
Total cash disbursements
Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.
Req 3
Schedule of Cash Disbursements for Purchases
August September
July
$ 91,000
78,330
$ 169,330
Req 4
Quarter
$ 91,000
261,100
209,720
299,600
89,040
89,040
$ 272,650 $ 298,760 $ 740,740
182,770
89,880
< Req 2A
Req 3 >
Transcribed Image Text:Required information Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B From accounts payable From July purchases From August purchases From September purchases Total cash disbursements Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Req 3 Schedule of Cash Disbursements for Purchases August September July $ 91,000 78,330 $ 169,330 Req 4 Quarter $ 91,000 261,100 209,720 299,600 89,040 89,040 $ 272,650 $ 298,760 $ 740,740 182,770 89,880 < Req 2A Req 3 >
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps

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.
Similar questions
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