Beech Corporation is a merchandising company that is preparing amaster budget for the third quarter of the calendar year. Thecompany’s balance sheet as of June 30th is shown below: BeechCorporation Balance Sheet June 30 Assets Cash $ 84,000 Accountsreceivable 144,000 Inventory 63,750 Plant and equipment, net ofdepreciation 223,000 Total assets $ 514,750 Liabilities andStockholders’ Equity Accounts payable $ 84,000 Common stock 349,000Retained earnings 81,750 Total liabilities and stockholders’ equity$ 514,750 5.value: 3.00 pointsRequired information Beech’s managershave made the following additional assumptions and estimates: 1.Estimated sales for July, August, September, and October will be$340,000, $360,000, $350,000, and $370,000, respectively. 2. Allsales are on credit and all credit sales are collected. Eachmonth’s credit sales are collected 35% in the month of sale and 65%in the month following the sale. All of the accounts receivable atJune 30 will be collected in July. 3. Each month’s ending inventorymust equal 25% of the cost of next month’s sales. The cost of goodssold is 75% of sales. The company pays for 40% of its merchandisepurchases in the month of the purchase and the remaining 60% in themonth following the purchase. All of the accounts payable at June30 will be paid in July. 4. Monthly selling and administrativeexpenses are always $44,000. Each month $6,000 of this total amountis depreciation expense and the remaining $38,000 relates toexpenses that are paid in the month they are incurred. 5. Thecompany does not plan to borrow money or pay or declare dividendsduring the quarter ended September 30. The company does not plan toissue any common stock or repurchase its own stock during thequarter ended September 30. Required: 1. Prepare a schedule ofexpected cash collections for July, August, and September. Alsocompute total cash collections for the quarter ended September 30.2-a. Prepare a merchandise purchases budget for July, August, andSeptember. Also compute total merchandise purchases for the quarterended September 30. 2-b. Prepare a schedule of expected cashdisbursements for merchandise purchases for July, August, andSeptember. Also compute total cash disbursements for merchandisepurchases for the quarter ended September 30. 3. Prepare an incomestatement for the quarter ended September 30. 4. Prepare a balancesheet as of September 30.