Beech's managers have made the following additional assumptions and estimates:
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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 cofected. 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 pald 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:
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.
2-6. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.
Dronare an income statement that comnite nat nerating income for the cuarter andart Sentomhar an

2-b. The preparation of a schedule of expected cash disbursements for merchandise purchases for July, August, and September for Beech Corporation is as follows:

Cash Disbursements:

July August September

Purchases $134,500 $135,000 $138,000

Cash payment for purchases:

40% month of purchase $53,800 $54,000 $55,300

60% month following 88,000 $80,700 81,000

Total cash payment $141,800 $134,700 $136,300

3. The preparation of an income statement showing the net operating income for the quarter for Beech Corporation is as follows:

Beech's Corporation

Income Statement:

July August September Total

Estimated sales $210,000 $230,000 $220,000 $660,000

Cost of goods sold $126,000 $138,000 $132,000 396,000

Gross profit $84,000 $92,000 $88,000 $264,000

Expenses:

Selling and admin. $60,000 $60,000 $60,000 $180,000

Net income $24,000 $32,000 $28,000 $84,000

Data and Calculations:

Sales Budget and Cash Collections

July August September October

Estimated sales $210,000 $230,000 $220,000 $240,000

Cash collection:

35% sales month $178,500 $80,500 $77,000 $84,000

65% month following 140,000 136,500 149,500 143,000

Total cash collections $318,500 $217,000 $226,500 $227,000

July August September October

Estimated sales $210,000 $230,000 $220,000 $240,000

Cost of goods sold $126,000 $138,000 $132,000 $144,000

Ending inventory $69,000 $66,000 $72,000

Goods available $195,000 $204,000 $204,000

Beginning inventory 60,500 69,000 66,000

Purchases $134,500 $135,000 $138,000

Cash payment for purchases:

40% month of purchase $53,800 $54,000 $55,300

60% month following 88,000 $80,700 81,000

Total cash payment $141,800 $134,700 $136,300

Beech Corporation

Balance Sheet at June 30:

Assets:

Cash $75,000

Accounts receivable 140,000 143,000

Inventory 60,500

Plant and Equipment 227,000

Total assets $508,500

Liabilities:

Accounts Payable $88,000 $82,700

Common Stock 311,000

Retained Earnings 109,500

Total liabilities & equity $508,500

Thus, the net operating income for the quarter ended September 30 for Beech Corporation is $84,000.

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