Question

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $360,000 for November, $380,000 for December, and $370,000 for January. • Collections are expected to be 75% in the month of sale, 22% in the month following the sale, and 3% uncollectible. • The cost of goods sold is 73% of sales. • The company desires an ending merchandise inventory equal to 85% 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 $21,400. • Monthly depreciation is $16,400. • Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	22,400
Accounts receivable (net of allowance for uncollectible accounts)		82,400
Merchandise Inventory		223,380
Property, plant and equipment (net of $662,000 accumulated depreciation)		1,170,000
Total assets	$	1,498,180
Liabilities and Stockholders’ Equity
Accounts payable	$	199,400
Common stock		880,000
Retained earnings		418,780
Total liabilities and stockholders’ equity	$	1,498,180

Required:

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

      

b.	Prepare a Merchandise Purchases Budget for November and December. (Input all amounts as positive values. Do not round intermediate calculations.)

      

c.	Prepare Cash Budgets for November and December. (Input all amounts as positive values.)

      

d.	Prepare Budgeted Income Statements for November and December.

      

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

      

rev: 12_12_2017_QC_CS-112143

References

Answer 1