[The following information applies to the questions displayedbelow.] Beech Corporation is a merchandising company that ispreparing a master budget for the third quarter of the calendaryear. The company’s balance sheet as of June 30th is shown below:Beech Corporation Balance Sheet June 30 Assets Cash $ 80,000Accounts receivable 135,000 Inventory 41,250 Plant and equipment,net of depreciation 211,000 Total assets $ 467,250 Liabilities andStockholders’ Equity Accounts payable $ 72,000 Common stock 345,000Retained earnings 50,250 Total liabilities and stockholders’ equity$ 467,250 Beech’s managers have made the following additionalassumptions and estimates: Estimated sales for July, August,September, and October will be $220,000, $240,000, $230,000, and$250,000, respectively. All sales are on credit and all creditsales are collected. Each month’s credit sales are collected 45% inthe month of sale and 55% in the month following the sale. All ofthe accounts receivable at June 30 will be collected in July. Eachmonth’s ending inventory must equal 15% of the cost of next month’ssales. The cost of goods sold is 70% of sales. The company pays for30% of its merchandise purchases in the month of the purchase andthe remaining 70% in the month following the purchase. All of theaccounts payable at June 30 will be paid in July. Monthly sellingand administrative expenses are always $40,000. Each month $6,000of this total amount is depreciation expense and the remaining$34,000 relates to expenses that are paid in the month they areincurred. The company does not plan to borrow money or pay ordeclare dividends during the quarter ended September 30. Thecompany does not plan to issue any common stock or repurchase itsown stock during the quarter ended September 30. Required: 1.Prepare a schedule of expected cash collections for July, August,and September. Also compute total cash collections for the quarterended September 30. 2-a. Prepare a merchandise purchases budget forJuly, August, and September. Also compute total merchandisepurchases for the quarter ended September 30. 2-b. Prepare aschedule of expected cash disbursements for merchandise purchasesfor July, August, and September. Also compute total cashdisbursements for merchandise purchases for the quarter endedSeptember 30. 3. Prepare an income statement for the quarter endedSeptember 30. 4. Prepare a balance sheet as of September 30.