Question: Beechs managers have made the following additional assumptions and estimates: Beech Corporation Balance Sheet June 30 Assets Cash $ 81,000 Accounts receivable 132,000 Inventory 56,250

Beechs managers have made the following additional assumptions and estimates:

Beech Corporation Balance Sheet June 30
Assets
Cash $ 81,000
Accounts receivable 132,000
Inventory 56,250
Plant and equipment, net of depreciation 214,000
Total assets $ 483,250
Liabilities and Stockholders Equity
Accounts payable $ 75,000
Common stock 346,000
Retained earnings 62,250
Total liabilities and stockholders equity $ 483,250
Beechs managers have made the following additional assumptions and estimates:

1.

Estimated sales for July, August, September, and October will be $250,000, $270,000, $260,000, and $280,000, respectively.
2.

All sales are on credit and all credit sales are collected. Each months 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 months ending inventory must equal 30% of the cost of next months sales. The cost of goods sold is 75% 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 $46,000. Each month $5,000 of this total amount is depreciation expense and the remaining $41,000 relates to expenses that are paid in the month they are incurred.
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.

Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.

Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.

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.

Prepare an income statement for the quarter ended September 30.

Prepare a balance sheet as of September 30.

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