Question
(12 points) Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: The company sells each
(12 points) Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: The company sells each unit for $45. Month Budgeted Sales: Sales in Units October 30,000 November 25,000 December 40,000 January 30,000 Collections are expected to be 70% in the month of sale, 30% in the month following the sale The A/R balance at September 30th will be collected in full in October. The cost of the merchandise is $38 per unit. In addition to meeting the current month's sales demand, management wants to maintain and ending inventory balance of 10% of the next month's sales. The beginning inventory balance at October 1st is 3,000 units. Payment for merchandise is made as follows: paid in the month of the purchase, paid th month following the purchase. The A/P balance at September 30th will be paid in full in October. A dividend was paid in October for $500,000. Minimum cash balance is $100,000. The company has a line of credit for $500,000 at an annual interest rate of 12%. Loans are taken out on first day of month borrowed and repaid at the end of the quarte with interest. + Balance Sheet September 30 Assets Cash Accounts receivable. Inventory. Property, plant and equipment (net of $200,000 accumulated depreciation). Total assets. Accounts payable.. $ 100,000 250,000 114,000 866,400 $1.330.400 Liabilities and Stockholders' Equity $ 300,000 582,000 Common stock. Retained earnings.. Total liabilities and stockholders' equity. 448,400 $1.330.400 Required: a. Prepare a Sales Budget for October, November, December, and Quarter. b. Prepare a Schedule of Expected Cash Collections for October, November, December, and Quarter. c. Prepare a Merchandise Purchases Budget for October, November, December, and Quarter. d. Prepare a Schedule of Expected Cash Disbursements for October, November, December, and Quarter. e. Prepare Cash Budgets for October, November, December, and Quarter. les Budget Units Sold Sales Price per unit October November December Quarter
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