Washington Gas Corporation supplies acetylene and other compressed gases to industry.Data regarding the store's operations follow:
• Sales are budgeted at $320,000 for November,$340,000 for December,and $330,000 for January.• Collections are expected to be 75% in the month of sale,20% in the month following the sale,and 5% uncollectible.• The cost of goods sold is 65% of sales.• The company purchases 80% of its merchandise in the month prior to the month of sale and 20% in the month of sale.Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $21,000.• Monthly depreciation is $16,000.• Ignore taxes.
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.

Question

Washington Gas Corporation supplies acetylene and other compressed gases to industry.Data regarding the store's operations follow:
• Sales are budgeted at $320,000 for November,$340,000 for December,and $330,000 for January.• Collections are expected to be 75% in the month of sale,20% in the month following the sale,and 5% uncollectible.• The cost of goods sold is 65% of sales.• The company purchases 80% of its merchandise in the month prior to the month of sale and 20% in the month of sale.Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $21,000.• Monthly depreciation is $16,000.• Ignore taxes. 
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.

Quizplus · Accepted Answer

The Answer of Washington Gas Corporation supplies acetylene and other compressed gases to industry.Data regarding the store's operations follow:
• Sales are budgeted at $320,000 for November,$340,000 for December,and $330,000 for January.• Collections are expected to be 75% in the month of sale,20% in the month following the sale,and 5% uncollectible.• The cost of goods sold is 65% of sales.• The company purchases 80% of its merchandise in the month prior to the month of sale and 20% in the month of sale.Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $21,000.• Monthly depreciation is $16,000.• Ignore taxes. 
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.

Washington Gas Corporation Supplies Acetylene and Other Compressed Gases to Industry.Data