Required information [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 in the picture provided: Beech's managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and October will be $360,000, $380,000, $370,000, and $390,000, 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 25% 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. Monthly selling and administrative expenses are always $48,000. Each month $7,000 of this total amount is depreciation expense and the remaining $41,000 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. Beech's managers have made the following additional assumptions and estimates: 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.
Required information [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 in the picture provided: Beech's managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and October will be $360,000, $380,000, $370,000, and $390,000, 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 25% 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. Monthly selling and administrative expenses are always $48,000. Each month $7,000 of this total amount is depreciation expense and the remaining $41,000 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. Beech's managers have made the following additional assumptions and estimates: 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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
![Required information [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 in the picture provided: Beech's managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and
October will be $360,000, $380,000, $370,000, and $390,000, 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 25% 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. Monthly
selling and administrative expenses are always $48,000. Each month $7,000 of this total amount is depreciation expense and the remaining $41,000 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. Beech's managers have made the following additional assumptions and estimates: 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb04a0b5-9adf-4f05-b09e-0027ad0b3702%2F8dc5e3b9-b364-4ce3-be9a-249d32c36c9b%2Fmp76dvp_processed.png&w=3840&q=75)
Transcribed Image Text:Required information [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 in the picture provided: Beech's managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and
October will be $360,000, $380,000, $370,000, and $390,000, 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 25% 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. Monthly
selling and administrative expenses are always $48,000. Each month $7,000 of this total amount is depreciation expense and the remaining $41,000 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. Beech's managers have made the following additional assumptions and estimates: 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.
![Required information
[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
Accounts receivable
Inventory
Plant and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
$ 95,000
142,000
54,000
225,000
$ 516,000
$86,000
332,000
98,000
$ 516,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb04a0b5-9adf-4f05-b09e-0027ad0b3702%2F8dc5e3b9-b364-4ce3-be9a-249d32c36c9b%2Fm7qw00a_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[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
Accounts receivable
Inventory
Plant and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
$ 95,000
142,000
54,000
225,000
$ 516,000
$86,000
332,000
98,000
$ 516,000
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