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 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 $20,100. • Monthly depreciation is $19,900. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,900 81,900 193,200 Accounts receivable Merchandise inventory Property, plant and equipment (net of $585,000 accumulated depreciation) 995,000 Total assets $1,291,000 Liabilities and Stockholders' Equity Accounts payable 2$ 194,900 500,000 596,100 Common stock Retained earnings Total liabilities and stockholders' equity $1,291,000 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 Rudgeted Income Statements for Novenmber and December
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.
![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 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 $20,100.
Monthly depreciation is $19,900.
Ignore taxes.
Balance Sheet
October 31
Assets
Cash
$
20,900
81,900
Accounts receivable
Merchandise inventory
193,200
Property, plant and equipment (net of $585,000 accumulated depreciation)
995,000
Total assets
$1,291,000
Liabilities and Stockholders' Equity
Accounts payable
$ 194,900
500,000
596,100
Common stock
Retained earnings
Total liabilities and stockholders' equity
$1,291,000
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff5cb4fd2-55d3-4596-8ed2-be312d1023ca%2Ff0c6f5dc-7068-46d5-b7c3-e0d8712dd38e%2F9evusw8_processed.jpeg&w=3840&q=75)
![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 a Schedule of Expected Cash Collections for November and December.
November
December
Sales
Schedule of Expected Cash Collections
Accounts receivable
November sales
December sales
Total cash collections
0 $
<Required A
Required B >
%24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff5cb4fd2-55d3-4596-8ed2-be312d1023ca%2Ff0c6f5dc-7068-46d5-b7c3-e0d8712dd38e%2Fi51exjcg_processed.jpeg&w=3840&q=75)
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