EXERCISE 8-17 Cash Flows; Budgeted Income Statement and Balance Sheet L8-2. LO 8-3. 0-4, LOB-9 LO8-10 Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below Balance Sheet September 30 Assets Cash Accounts receivable $59,000 90,000 32.400 Buildings and equipment, net of depreciation Total assets. 314,000 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders s 73,000 216,000 106.400 equity $395.400 The company is in the process of preparing a budget for Oktober and has assembled the following data l. Sales are budgeted at $240,000 for October and S250.00 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 theremaining 60% s 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 ts always 30% of the following month's cost of goods sold 2 3. All merchandise parchases are on accoust. Thirty percent of all purchases are paid for in the 4. month of purchase and 70% arepaid 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 Master Budgeting Required Using the new assumptions described above, complete the following requirements: 1. Prepare a schedule of expected cash collections for July, August, and September. Also com- pute total cash collections for the quarter ended September 30 2. a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30 b. Prepare a schedule of expected cash disbursements for merchandise purchases for July August, and September. Also compute total cash disbursements for merchandise pur- chases for the quarter ended September 30 Using Schedule 9 as your guide, prepare an income statement for the quarter ended September 30 3. 4. Prepare a balance sheet as of September 30 EXERCISE 8-17 Cash Flows; Budgeted Income Statement and Balance Sheet L8-2. LO 8-3. 0-4, LOB-9 LO8-10 Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below Balance Sheet September 30 Assets Cash Accounts receivable $59,000 90,000 32.400 Buildings and equipment, net of depreciation Total assets. 314,000 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders s 73,000 216,000 106.400 equity $395.400 The company is in the process of preparing a budget for Oktober and has assembled the following data l. Sales are budgeted at $240,000 for October and S250.00 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 theremaining 60% s 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 ts always 30% of the following month's cost of goods sold 2 3. All merchandise parchases are on accoust. Thirty percent of all purchases are paid for in the 4. month of purchase and 70% arepaid 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 Master Budgeting Required Using the new assumptions described above, complete the following requirements: 1. Prepare a schedule of expected cash collections for July, August, and September. Also com- pute total cash collections for the quarter ended September 30 2. a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30 b. Prepare a schedule of expected cash disbursements for merchandise purchases for July August, and September. Also compute total cash disbursements for merchandise pur- chases for the quarter ended September 30 Using Schedule 9 as your guide, prepare an income statement for the quarter ended September 30 3. 4. Prepare a balance sheet as of September 30
