EXERCISE 8-17 Cash Flows; Budgeted Income Statement and Balance Sheet LO 8-2, LO 8-3, Lo 8-4. L08-9, L08-10 Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below Wheeling Company Balance Sheet September 30 Assets $59,000 90,000 32,400 214,000 Inventory. .. . $395,400 Liabilities and Stockholders' Equity $ 73,000 . 216,000 Accounts payable Retained earnings Total liabilities and stockholders' equity 106,400 $395.400 . . . . October and has assembled the following data: The company is in the process of preparing a budget for 1. Sales are budgeted at $240,000 for October and $250,000 for November. Of these sales, 35% will be for cash; the remainder will be credit sales. Forty percent of a month's credit sales are collected in the month the sales are made, and the remaining 60% is collected in the following month. All of the September 30 accounts receivable will be collected in October. The budgeted cost of goods sold is always 45% of sales and the ending merchandise inventory is always 30% of the following month's cost of goods sold. All merchandise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and 70% are paid for in the following month. All of the September 30 accounts payable to suppliers will be paid during October. Selling and administrative expenses for October are budgeted at $78,000, exclusive of depre- ciation. These expenses will be paid in cash. Depreciation is budgeted at $2,000 for the month. 2. 3. 4