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 70% 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 $22,300. Monthly depreciation is $22,100. • Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment (net of $605,000 accumu lated depreciation) 23,100 84,100 169,050 1,015,080 $1,291,250 Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 197,100 950,000 144, 150 $1,291,250
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 70% 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 $22,300. Monthly depreciation is $22,100. • Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment (net of $605,000 accumu lated depreciation) 23,100 84,100 169,050 1,015,080 $1,291,250 Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 197,100 950,000 144, 150 $1,291,250
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
100%
a.Prepare Schedule of expected Cash collection and Merchandise purchase budget for November and December
b.Prepare
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 70% 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 $22,300.
• Monthly depreciation is $22,100.
• Ignore taxes.
Balance Sheet
October 31
Assets
Cash
Accounts receivable
Merchandise inventory
Property, plant and equipment (net of $605,000 accumulated depreciation)
Total assets
23,100
84,100
169,050
1,015,000
$1,291,250
Liabilities and stockholders' Equity
Accounts payable
Common stock
Retained earnings
$ 197,100
950,000
144,150
$1,291,250
Total liabilities and stockholders' equity
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