60.1K

Verified Solution

Link Copied!

Weller Industrial Gas Corporation supplies acetyene and other compressed gases to industry.

Data regarding the store's operations follow:

• Sales are budgeted at $330,000 for November, 300,000 for December, and 320,000 for January.
• Collections are expected to be 85% in the month of sale, 14% in the month following the sale, and 1% uncollection.
• The goods of goods sold is 60% of sales.
• the company purchase 80% of its mechandies in the month prior to the month of sale and 20% in the month of sale. Payment for merchandies is made in the month following the purchase.
• othe monthly expenses to be paid in cash are $21,200.
• Monthly depreciation is 21,000.
• Ignore taxes.

Statement of Financial Position, October 31

- Assets

Cash $22,000

Accounts receivable(net) $83,000

Inventory $158,000

Property, plant and equipment (net of 594,000

accumulated depreciation) $1,004,000

-------------------------------------------------------------

-Total assets $1,267,400

-Liabilities and Stockholders' equity

Accounts payable $196,000

Common stock $620,000

Retained earings $451,400

------------------------------------------------------------

Total libailities and stockholders's equity $1,267,400

Required:

1. schedule of expected cash collections for November and December.
2. merchandise purchases budget for November and December.
3. prepare cash budgets for November and December.
4. prepare budget income statements for November and December.
5. budgeted balance sheet for the end of December.

Answer & Explanation Solved by verified expert

See Answer