Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $370,000 for November, $390,000 for December, and $380,000 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 74% 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 $21,700. Monthly depreciation is $21,500. • Ignore taxes. Assets Balance Sheet October 31 Cash Accounts receivable Merchandise inventory Property, plant and equipment (net of $599,000 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. $ 22,500 83,500 219,040 1,009,000 $ 1,334,040 $ 196,500 -670,000 467,540 $ 1,334,040
Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $370,000 for November, $390,000 for December, and $380,000 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 74% 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 $21,700. Monthly depreciation is $21,500. • Ignore taxes. Assets Balance Sheet October 31 Cash Accounts receivable Merchandise inventory Property, plant and equipment (net of $599,000 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. $ 22,500 83,500 219,040 1,009,000 $ 1,334,040 $ 196,500 -670,000 467,540 $ 1,334,040
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 $370,000 for November, $390,000 for December, and $380,000 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 74% 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 $21,700.
Monthly depreciation is $21,500.
• Ignore taxes.
Assets
Balance Sheet
October 31
Cash
Accounts receivable
Merchandise inventory
Property, plant and equipment (net of $599,000 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.
$ 22,500
83,500
219,040
1,009,000
$ 1,334,040
$ 196,500
-670,000
467,540
$ 1,334,040
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