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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 $19,800. • Ignore taxes. Balance Sheet October 31 Assets Cash 2$ 20,800 81,800 Accounts receivable Merchandise inventory 214, 200 994,000 Property, plant and equipment (net of $584,000 accumulated depreciation) Total ass ets $1,310,800 Liabilities and Stockholders' Equity Accounts payable Common stock $ 194,800 490,000 626,000 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. Neus.

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 $19,800. • Ignore taxes. Balance Sheet October 31 Assets Cash 2$ 20,800 81,800 Accounts receivable Merchandise inventory 214, 200 994,000 Property, plant and equipment (net of $584,000 accumulated depreciation) Total ass ets $1,310,800 Liabilities and Stockholders' Equity Accounts payable Common stock $ 194,800 490,000 626,000 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. Neus.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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: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.
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 Cash Budgets for November and December. November December Cash disbursements for merchandise Other monthly cash expenses Total cash disbursements Beginning cash balance Add cash receipts Total cash available Less cash disbursements Excess (deficiency) of cash available over disbursements Financing Ending cash balance < Required B Required D >
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 Cash Budgets for November and December. November December Cash disbursements for merchandise Other monthly cash expenses Total cash disbursements Beginning cash balance Add cash receipts Total cash available Less cash disbursements Excess (deficiency) of cash available over disbursements Financing Ending cash balance < Required B Required D >
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