Question

TB Problem Qu. 8-224 Weller Industrial Gas Corporation ...

Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

•Sales are budgeted at $390,000 for November, $410,000 for December, and $400,000 for January.

•Collections are expected to be 80% in the month of sale and 20% in the month following the sale.

•The cost of goods sold is 73% of sales.

•The company desires an ending merchandise inventory equal to 80% of the cost of goods sold in the following month.

•Payment for merchandise is made in the month following the purchase.

•Other monthly expenses to be paid in cash are $20,900.

•Monthly depreciation is $20,700.

•Ignore taxes.

Balance Sheet

October 31

Assets

Cash

$

21,700

Accounts receivable

82,700

Merchandise inventory

227,760

Property, plant and equipment (net of $593,000 accumulated depreciation)

1,003,000

Total assets

$

1,335,160

Liabilities and Stockholders' Equity

Accounts payable

$

195,700

Common stock

580,000

Retained earnings

559,460

Total liabilities and stockholders' equity

$

1,335,160

Required:

a. Prepare a Schedule of Expected Cash Collections for November and December.

b. Prepare a Merchandise Purchases Budget for November and December.

c. Prepare Cash Budgets for November and December.

d. Prepare Budgeted Income Statements for November and December.

e. Prepare a Budgeted Balance Sheet for the end of December.

can you show step by step on how you get the number, please!

Answer 1

Budget