A Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

Sales are budgeted at $320,000 for November, $340,000 for December, and $330,000 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 ending merchandise inventory to equal 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,000. Monthly depreciation is $16,000. Ignore taxes.

The Schedule of Expected Cash Collections for November and December.

The Merchandise

Purchases Budget for November and December.

The Cash Budget for November & December

1. Prepare Budgeted Income Statements for November and December.

2. Prepare a Budgeted Balance Sheet for the end of December.