Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar yea

Post by **answerhappygod** » Sun Jul 03, 2022 1:08 pm

Beech Corporation is a merchandising company that is preparing amaster budget for the third quarter of the calendar year. Thecompany’s balance sheet as of June 30th is shown below:

: Beech Corporation Is A Merchandising Company That Is Preparing A Master Budget For The Third Quarter Of The Calendar Yea 1 (28.57 KiB) Viewed 11 times

Exercise 8-12 REV (Algo)
Beech’s managers have made the following additional assumptionsand estimates:
Estimated sales for July, August, September, and October will be$310,000, $330,000, $320,000, and $340,000, respectively.
All sales are on credit and all credit sales are collected. Eachmonth’s credit sales are collected 35% in the month of sale and 65%in the month following the sale. All of the accounts receivable atJune 30 will be collected in July.
Each month’s ending inventory must equal 30% of the cost of nextmonth’s sales. The cost of goods sold is 75% of sales. The companypays for 40% of its merchandise purchases in the month of thepurchase 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 $6,000 of this total amount is depreciation expense andthe remaining $52,000 relates to expenses that are paid in themonth they are incurred.
The company does not plan to borrow money or pay or declaredividends during the quarter ended September 30. The company doesnot plan to issue any common stock or repurchase its own stockduring the quarter ended September 30.
Required:
1. Prepare a schedule of expected cash collections for July,August, and September. Also compute total cash collections for thequarter ended September 30.
2-a. Prepare a merchandise purchases budget for July, August,and September. Also compute total merchandise purchases for thequarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements formerchandise purchases for July, August, and September. Also computetotal cash disbursements for merchandise purchases for the quarterended September 30.

: Beech Corporation Is A Merchandising Company That Is Preparing A Master Budget For The Third Quarter Of The Calendar Yea 2 (28.95 KiB) Viewed 11 times

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 $ 83,000 126,000 69,750 220,000 $ 498,750 $ 81,000 348,000 69,750 $ 498,750
Req 1 Req 2A Req 2B Prepare a schedule of expected cash collections for July, August, and September. Schedule of Expected Cash Collections Month August September Quarter From accounts receivable From July sales From August sales From September sales Total cash collections July $ 126,000 108,500 $ 126,000 310,000 214,500 330,000 112,000 112,000 $ 234,500 $317,000 $326,500 $ 878,000 201,500 115,500
Req 1 Req 2A Req 2B Prepare a merchandise purchases budget for July, August, and September. Also compute total mercha quarter ended September 30. Merchandise Purchases Budget July Budgeted cost of goods sold Add: Desired ending merchandise inventory Total needs Less: Beginning merchandise inventory Required purchases August September Quarter $ 232,500 $ 247,500 $ 240,000 $720,000
Req 1 Req 2A Req 2B Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Schedule of Cash Disbursements for Purchases August September From accounts payable From July purchases From August purchases From September purchases Total cash disbursements July $77,000 $ 77,000 $ 0 $ Quarter $ 77,000 0 0 0 0 $ 77,000