Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
o Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January.
o Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.
o The cost of goods sold is 65% of sales.
o The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month.
o Payment for merchandise is made in the month following the purchase.
o Other monthly expenses to be paid in cash are $21,900.
o Monthly depreciation is $20,000.
o 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

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
o Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January.
o Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.
o The cost of goods sold is 65% of sales.
o The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month.
o Payment for merchandise is made in the month following the purchase.
o Other monthly expenses to be paid in cash are $21,900.
o Monthly depreciation is $20,000.
o 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 Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
o Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January.
o Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.
o The cost of goods sold is 65% of sales.
o The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month.
o Payment for merchandise is made in the month following the purchase.
o Other monthly expenses to be paid in cash are $21,900.
o Monthly depreciation is $20,000.
o 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.

Weldon Industrial Gas Corporation Supplies Acetylene and Other Compressed Gases