[The following information applies to the Beech Corporation is a merchandising company that is preparing a master budget for the third quarter. 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 Exercise 8-12 (Algo) $ 73,000 125,000 56,000 221,000 $475,000 $ 82,000 309,000 84,000 $475,000 Beech's managers made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $320,000, $340,000, $330,000, and $350,000, 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 25% 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 $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 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.
[The following information applies to the Beech Corporation is a merchandising company that is preparing a master budget for the third quarter. 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 Exercise 8-12 (Algo) $ 73,000 125,000 56,000 221,000 $475,000 $ 82,000 309,000 84,000 $475,000 Beech's managers made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $320,000, $340,000, $330,000, and $350,000, 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 25% 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 $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Answer all the requirements….
Transcribed Image Text:[The following information applies to the questions
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter. 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
Exercise 8-12 (Algo)
$ 73,000
125,000
56,000
221,000
$475,000
$ 82,000
309,000
84,000
$475,000
Beech's managers made the following additional assumptions and estimates:
1. Estimated sales for July, August, September, and October will be $320,000, $340,000, $330,000, and $350,000, 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 25% 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 $40,000. Each month $6,000 of this total amount is depreciation expense
and the remaining $34,000 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:Required:
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.
2-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.
4. Prepare a balance sheet as of September 30.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2A Required 2B
Required 3
Prepare a merchandise purchases budget for July, August, and September. Also, compute total merchandise purchases for the
quarter ended September 30.
Budgeted cost of goods sold
Add: Desired ending merchandise inventory
Total needs
Less: Beginning merchandise inventory
Required purchases
Required 4
Merchandise Purchases Budget
July
< Required 1
August September Quarter
$231,000 $693,000
$ 224,000 $ 238,000
Required 2B >
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do requirements 2A through 4 again please ASAP
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