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:

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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
$60,000. 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.

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.

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. Use the absorption format shown in Schedule 9 .

4. Prepare a balance sheet as of September 30.

It isn’t balancing. Show work on all of the Requirements please!
Can you also explain each of the steps too? Thank you for your
wonderful help!

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