Weltin Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November, $370,000 for December, and $380,000 for January. Collections are expected to be 90% in the month of sale, 5% in the month following the sale, and 5% uncollectible. The cost of goods sold is 60% of sales. The company purchases 70% of its merchandise in the month prior to the month of sale and 30% in the month of sale. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,800. Monthly depreciation is $18,000. Ignore taxes. Required: Prepare a Schedule of Expected Cash Collections for November and December. Prepare a Merchandise Purchases Budget for November and December. Prepare Cash Budgets for November and December. Prepare Budgeted Income Statements for November and December. Prepare a Budgeted Balance Sheet for the end of December.
Weltin Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November, $370,000 for December, and $380,000 for January. Collections are expected to be 90% in the month of sale, 5% in the month following the sale, and 5% uncollectible. The cost of goods sold is 60% of sales. The company purchases 70% of its merchandise in the month prior to the month of sale and 30% in the month of sale. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,800. Monthly depreciation is $18,000. Ignore taxes. Required: Prepare a Schedule of Expected Cash Collections for November and December. Prepare a Merchandise Purchases Budget for November and December. Prepare Cash Budgets for November and December. Prepare Budgeted Income Statements for November and December. 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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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. Weltin Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
- Sales are budgeted at $390,000 for November, $370,000 for December, and $380,000 for January.
- Collections are expected to be 90% in the month of sale, 5% in the month following the sale, and 5% uncollectible.
- The cost of goods sold is 60% of sales.
- The company purchases 70% of its merchandise in the month prior to the month of sale and 30% in the month of sale. Payment for merchandise is made in the month following the purchase.
- Other monthly expenses to be paid in cash are $21,800.
- Monthly
depreciation is $18,000. - Ignore taxes.
Required:
- Prepare a Schedule of Expected Cash Collections for November and December.
- Prepare a Merchandise Purchases Budget for November and December.
- Prepare
Cash Budgets for November and December. - Prepare
Budgeted Income Statements for November and December. - Prepare a Budgeted
Balance Sheet for the end of December.
Transcribed Image Text:Statement of Financial Position
October 31
Assets
Cash..
25,000
Accounts receivable (net of allowance for
uncollectible accounts)
71,000
163,800
Inventory
Property, plant and equipment (net of
$504,000 accumulated depreciation)...
Total assets.
1.088.000
$1,347,800
Liabilities and Stockholders' Equity
Accounts payable
Common stock.
Retained earnings.
Total liabilities and stockholders' equity...
$ 232,000
700,000
415,800
$1,347.800
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