2. (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 Budgeted Sales Month October November December January Sales in Units 30,000 25,000 40,000 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 ending inventory balance at September 30th is 3,000 units Payment for merchandise is made as follows: 2 paid in the month of the purchase, /2 paid the 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 quarter with interest. . Balance Sheet September 30 Assets $ 100,000 Cash.... ..250,000 114,000 Inventory Property, plant and equipment (net of $200,000 accumulated depreciation.866.400 $1,330.400 Liabilities and Stockholders' Equity 300,000 Accounts payable Common stock 582,000 448,400 S1,330.400 Retained earnings 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. and Quarter December, and Quarter c. Prepare a Merchandise Purchases Budget for October, November, December, d. Prepare a Schedule of Expected Cash Disbursements for October, November, e. Prepare Cash Budgets for October, November, December, and Quarter Sales Budget Units Sold Sales Price per unit Total Sales October November December Quarter Schedule of Expected Cash Collections Beginning A/R October Sales November Sales December Sales Total October November December Quarter Purchases Budget October December November Quarter Budgeted Sales +Desired ending inv. - total needs -Beginning inv. -Total Purchases X cost per unit -Total purchase cost Schedule of Expected Cash Disbursements October November December Quarter Beginning A/P October Purchases November Purchases December Purchases Total Cash Budget October November December Quarter Beginning Cash bal. +Cash collections -Cash Available Less: Cash Disburse For Purchases Dividend -Total cash disburse Excess/(Deficiency) Borrowing Repayment Interest Ending Cash bal