Refer to the data for Beech Corporation in Exercise 812. The company is considering making the following
Question:
In Exercise 812 Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The companys balance sheet as of June 30th is shown below:
1. Each months credit sales are collected 45% in the month of sale and 55% in the month following the sale.
2. Each months ending inventory must equal 20% of the cost of next months sales.
3. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All other information from Exercise 812 that is not mentioned above remains the same.
Required:
Using the new assumptions described above, complete the following requirements:
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 September30.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer