Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $360,000 for November, $380,000 for December, and $370,000 for January. • Collections are expected to be 75% in the month of sale and 25% in the month following the sale. • The cost of goods sold is 70% of sales. • The company desires an ending merchandise inventory equal to 85% 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 $20,000. • Monthly depreciation is $19,800. Ignore taxes. Balance Sheet October 31 Assets Cash 20,800 Accounts receivable 81,800 Merchandise inventory 214,200 994,000 Property, plant and equipment (net of $584,000 accumulated depreciation) Total assets $1,310,800 Liabilities and Stockholders' Equity Accounts payable $ 194,800 Common stock 490,000 626,000 Retained earnings Total liabilities and stockholders' equity $1,310,800 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.
Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $360,000 for November, $380,000 for December, and $370,000 for January. • Collections are expected to be 75% in the month of sale and 25% in the month following the sale. • The cost of goods sold is 70% of sales. • The company desires an ending merchandise inventory equal to 85% 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 $20,000. • Monthly depreciation is $19,800. Ignore taxes. Balance Sheet October 31 Assets Cash 20,800 Accounts receivable 81,800 Merchandise inventory 214,200 994,000 Property, plant and equipment (net of $584,000 accumulated depreciation) Total assets $1,310,800 Liabilities and Stockholders' Equity Accounts payable $ 194,800 Common stock 490,000 626,000 Retained earnings Total liabilities and stockholders' equity $1,310,800 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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Please use the formatting provided and please help with c, d, and e
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 $360,000 for November, $380,000 for December, and $370,000 for January.
• Collections are expected to be 75% in the month of sale and 25% in the month following the sale.
• The cost of goods sold is 70% of sales.
• The company desires an ending merchandise inventory equal to 85% 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 $20,000.
Monthly depreciation is $19,800.
Ignore taxes.
Balance Sheet
October 31
Assets
Cash
$
20,800
81,800
214, 200
Accounts receivable
Merchandise inventory
Property, plant and equipment (net of $584,000 accumulated depreciation)
994,000
Total assets
$1,310,800
Liabilities and Stockholders' Equity
Accounts payable
$ 194,800
490,000
Common stock
Retained earnings
626,000
Total liabilities and stockholders' equity
$1,310,800
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.
Transcribed Image Text: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 Budgeted Income Statements for November and December.
November
December
Sales
Cost of goods sold
Other monthly expenses
Depreciation
< Required C
Required E >
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