Question

Weller Industrial 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 70% in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales. • The company desires an ending merchandise inventory equal to 75% 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 $20,700. Monthly depreciation is $20,500. Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment (net of $591, eee accumulated depreciation) Total assets $ 21,589 82,500 180,eee 1, e81, eee $1,285,880 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 195,500 560, eee 529,500 $1,285, eee 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. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Prepare a Schedule of Expected Cash Collections for November and December. November December Sales Schedule of Expected Cash Collections Accounts receivable November sales December sales Total cash collections S 0 S 0

Answer 1

Part A November December $320,000 $340,000 Sales Schedule of Expected Cash Collections Accounts Receivable November Sales December Sales Total Cash Collection $82,500 $224,000 $96,000 $238,000 $334,000 $306,500 Part B Budgeted Cost of Goods Sold Add: Ending Merchandise Inventory Total Needs Less: Opening Merchandise Inventory Required purchase November December $240,000 $255,000 $191,250 $185,625 $431,250 $440,625 ($180,000) ($191,250) $251,250 $249,375 Part C Cash disbursements for merchandise Other monthly cash expenses Total cash disbursements November December $195,500 $251,250 $20,700 $20,700 $216,200 $271,950 Beginning cash balance Add: Cash Receipts Total Cash Available Less: Cash Disbursements Excess (Deficiency) of cash available over disbursements Financing Ending Cash Balance $21,500 $306,500 $328,000 ($216,200) $111,800 $0 $111,800 $111,800 $334,000 $445,800 ($271,950) $173,850 SO $173,850 Part D Sales Cost of Goods Sold Gross Margin Other montly expense Depreciation Net Income November December $320,000 $340,000 $240,000 $255,000 $80,000 $85,000 $20,700 $20,700 $20,500 $20,500 $38,800 $43,800 Part E Balance Sheet December 31 Assets Cash Accounts Receivable Inventory Property, plant and equipment (net of Accumulated Depreciation) Total Assets $173,850 $102,000 $185,625 $960,000 $1,421,475 Liabilities and Stockholders' Equity Accounts Payable Common Stock Retained Earnings Total liabilities and Stockholders' Equity $249,375 $560,000 $612,100 $1,421,475

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