Weller Industrial Ges Corporation supplies acetylene and other compressed geses to industry. Dets regarding the store's operations follow: Sales are budgeted at $300,000 for November, $320,000 for December, and $310,000 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 76% 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, 600. Monthly depreciation is $20,400. Ignore taxes Balance Sheet October 31 Assets Cash $ 21,400 Accounts receivable 82,400 Merchandise inventory 182,400 Property, plant and equipment (net of $590,000 accumulated depreciation) 1,000,000 Total assets $1,286, 200 Liabilities and Shareholder's Equity Accounts payable $ 195,400 Common shares 550,000 Retained earnings 540,800 Total liabilities and shareholder's equity $1,286,200 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
Weller Industrial Ges Corporation supplies acetylene and other compressed geses to industry. Dets regarding the store's operations follow: Sales are budgeted at $300,000 for November, $320,000 for December, and $310,000 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 76% 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, 600. Monthly depreciation is $20,400. Ignore taxes Balance Sheet October 31 Assets Cash $ 21,400 Accounts receivable 82,400 Merchandise inventory 182,400 Property, plant and equipment (net of $590,000 accumulated depreciation) 1,000,000 Total assets $1,286, 200 Liabilities and Shareholder's Equity Accounts payable $ 195,400 Common shares 550,000 Retained earnings 540,800 Total liabilities and shareholder's equity $1,286,200 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Weller Industrial Ges Corporation supplies acetylene and other compressed geses to industry. Dets regarding the store's
operations follow:
Sales are budgeted at $300,000 for November, $320,000 for December, and $310,000 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 76% 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, 600.
Monthly depreciation is $20,400.
Ignore taxes
Balance Sheet
October 31
Assets
Cash $ 21,400
Accounts receivable 82,400
Merchandise inventory 182,400
Property, plant and equipment (net of $590,000 accumulated depreciation) 1,000,000
Total assets $1,286, 200
Liabilities and Shareholder's Equity
Accounts payable $ 195,400
Common shares 550,000
Retained earnings 540,800
Total liabilities and shareholder's equity $1,286,200
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
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