Required: 1. Prepare a schedule of expected cash collections for July August, and September 2-a. Prepare…
The following solution is suggested to handle the subject “Required: 1. Prepare a schedule of expected cash collections for July August, and September 2-a. Prepare…“. Let’s keep an eye on the content below!
Question “Required: 1. Prepare a schedule of expected cash collections for July August, and September 2-a. Prepare…”
Answer
1)
Schedule of Cash Collections Expected | ||||
Month | ||||
July | August | September | Quarter | |
Accounts receivable | $126000 | $126000 | ||
Sales starting July | (310000*35%)= 108500 | (310000*65%)= 201500 | 310000 | |
Sales starting in August | (330000*35%)= 115500 | (330000*65%)= 214500 | 330000 | |
Sales starting in September | (320000*35%)= 112000 | 112000 | ||
Total cash collection | $234500 | $317000 | $326500 | $878000 |
2-a)
Merchandise Purchases Budget | ||||
July | August | September | Quarter | |
Cost of goods sold in budget | (310000*75%)= $232500 | (330000*75%)= $247500 | (320000*75%)= $240000 | $720000 |
Add: Desired end merchandise inventory | 74250 | 72000 | 76500 | 76500 |
Total needs | 306750 | 319500 | 316500 | 796500 |
Less: Beginning merchandise inventory | 69750 | 74250 | 72000 | 69750 |
Production is required | $237000 | $245250 | $244500 | $726750 |
Calculation for Desired Ending Product Inventory
July= $247500*30%= $74250
August= $240000*30%= $72000
September = $340000*75%*30%=$76500
b)
Schedule of cash disbursements for purchases | ||||
July | August | September | Quarter | |
Account payable | $81000 | $81000 | ||
July Purchases | (237000*40%)= 94800 | (237000*60%)= 142200 | 237000 | |
August Purchases | (245250*40%)= 98100 | (245250*60%)= 147150 | 245250 | |
September Purchases | (244500*40%)= 97800 | 97800 | ||
Total cash disbursements | $175800 | $240300 | $244950 | $661050 |
3)
Beech Corporation | |
Income Statement | |
The Quarter Ended September 30, | |
Sales ($310000+330000+320000) | $960000 |
Selling price | 720000 |
Gross profit | 240000 |
Selling and administrative expenses (58000*3) | 174000 |
Net income | $66000 |
4)
Beech Corporation | |
Balance Sheet | |
September 30, | |
Assets | |
Cash | $143950 |
Recoverable accounts ($320000*65%). | 208000 |
Inventory | 76500 |
Net of depreciation, plant and equipment | 202000 |
Total assets | $630450 |
Stockholders Equity and Liabilities | |
Accounts payable (2445500*60%) | 146700 |
Common stock | 348000 |
Retained earnings ($69750+66000). | 135750 |
Total liabilities and stockholders equity | $630450 |
Cash= Beginning balance+Cash collected-Cash disbursements-Selling and administrative expenses
= $83000+878000-661050-(52000*3)= $143950
Quarterly depreciation = $6000*3= $18000
Plant and equipment = $220000-18000= 202000
Conclusion
Above is the solution for “Required: 1. Prepare a schedule of expected cash collections for July August, and September 2-a. Prepare…“. We hope that you find a good answer and gain the knowledge about this topic of business.