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.
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.
Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
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Chapter8: Budgeting For Planning And Control
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Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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![[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
$ 90,000
136,000
62,000
Cash
Accounts receivable
Inventory
Plant and equipment, net of depreciation
210,000
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
Beech's managers have made the following additional assumptions and estimates:
1. Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, 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 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 following
the purchase. All of the accounts payable at June 30 will be paid in July.
4. Monthly selling and administrative expenses are always $60,00O. Each month $5,000 of this total amount is depreciation expense
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 company
does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe44ae214-cf2d-4904-b0ba-adbb4991fe6c%2F299a067d-281c-4bd4-b119-b5237d93a911%2Fk6rnc07_processed.jpeg&w=3840&q=75)
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:
Beech Corporation
Balance Sheet
June 30
Assets
$ 90,000
136,000
62,000
Cash
Accounts receivable
Inventory
Plant and equipment, net of depreciation
210,000
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
Beech's managers have made the following additional assumptions and estimates:
1. Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, 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 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 following
the purchase. All of the accounts payable at June 30 will be paid in July.
4. Monthly selling and administrative expenses are always $60,00O. Each month $5,000 of this total amount is depreciation expense
and the remaining $55,000 relates to expenses that are paid in the month they are incurred.
5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company
does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
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Required information
Required:
1. Prepare a schedule of expected cash collections for July, August, and September.
2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the
quarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.
3. Prepare an income statement that computes net operating income for the quarter ended September 30.
4. Prepare a balance sheet as of September 30.
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Req 1
Req 2A
Req 2B
Req 3
Req 4
Prepare a schedule of expected cash collections for July, August, and September.
Schedule of Expected Cash Collections
Month
July
August
September
Quarter
2$
From July sales
From August sales
From September sales
Total cash collections
0 $
0 $
0 $
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