1. Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January. Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible. The cost of goods sold is 65% of sales. The company desires an ending merchandise inventory equal to 60% 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 $21,900. Monthly depreciation is $20,000. Ignore taxes.

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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Balance Sheet October 31 Assets Cash Accounts receivable (net of allowance for uncollectible accounts)... Merchandise inventory Property, plant and equipment (net of $500,000 accumulated depreciation)...... Total assets... $ 16,000 74,000 140.400 1066000 $1.296.400 Liabilities and Stockholders' Equity Accounts payable Common stock...... Retained earings..... Total liabilities and stockholders' equity $ 240,000 640,000 416,400 $1.296.400