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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
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Transcribed Image Text:Weller Industrial Gas Corporation supplies acetylene and other compressed gases to Industry. Data regarding the store's operations
follow:
⚫ Sales are budgeted at $350,000 for November, $370,000 for December, and $360,000 for January.
⚫ Collections are expected to be 80% in the month of sale and 20% In the month following the sale.
.
The cost of goods sold is 69% of sales.
⚫ The company desires an ending merchandise Inventory equal to 80% 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 $20,100.
Monthly depreciation is $19,900.
Ignore taxes.
Assets
Cash
Balance Sheet
October 31
Accounts receivable
Merchandise inventory
Property, plant and equipment (net of $585,000 accumulated depreciation)
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
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 Budgeted Balance Sheet for the end of December.
Assets
Cash
Accounts receivable
Balance Sheet
December 31
Inventory
Property, plant and equipment (net of accumulated depreciation)
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
< Required D
$
$
Required E >
$
20,900
81,900
193,200
995,000
$1,291,000
$ 194,900
500,000
596,100
$1,291,000
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