Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operatic follow: • Sales are budgeted at $310,000 for November, $330,000 for December, and $320,000 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 77% 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 $20,500. • Monthly depreciation is $20,300. • Ignore taxes. Balance Sheet October 31 Assets Cash 2$ 21,300 Accounts receivable 82,300 202,895 999,000 Merchandise inventory Property, plant and equipment (net of $589,000 accumulated depreciation) Total assets $1,305,495 Liabilities and Stockholders' Equity Accounts payable $ 195,300 Common stock 540,000 Retained earnings 570,195 $1,305,495 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. E and D ecember
Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operatic follow: • Sales are budgeted at $310,000 for November, $330,000 for December, and $320,000 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 77% 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 $20,500. • Monthly depreciation is $20,300. • Ignore taxes. Balance Sheet October 31 Assets Cash 2$ 21,300 Accounts receivable 82,300 202,895 999,000 Merchandise inventory Property, plant and equipment (net of $589,000 accumulated depreciation) Total assets $1,305,495 Liabilities and Stockholders' Equity Accounts payable $ 195,300 Common stock 540,000 Retained earnings 570,195 $1,305,495 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. E and D ecember
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
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 $310,000 for November, $330,000 for December, and $320,000 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 77% 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 $20,500.
Monthly depreciation is $20,300.
Ignore taxes.
Balance Sheet
October 31
Assets
Cash
21,300
Accounts receivable
82,300
Merchandise inventory
202,895
Property, plant and equipment (net of $589, 000 accumulated depreciation)
999,000
Total assets
$1,305,495
Liabilities and Stockholders' Equity
$
195,300
540,000
570,195
Accounts payable
Common stock
Retained earnings
$1,305,495
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 B
Required C
Required D
Required E
Required A
Prepare a Schedule of Expected Cash Collections for November and December.
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