Exercise 8-17 (Static) Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO84, L08-9, L08-10] Wheeling Compary is a merchandiser that provided a balance sheet as of September 30 as shown below: The company is in the process of preparing a budget for October and has assembied the following data: 1 1. 5 ales are budgeted at $240,000 for October and $250,000 for November, Of these sales, 35% will be for castr, the remainder wal be credit sales. Forty percent of o month's credit sales are collected in the month the sales are made, and the remaining 60% is coliected in the following month. All of the Seotember 30 accounts recelvable will be collected in Octoker 2. The budgeted cost of goods sold is always 45tif of sales and the ending merchandise inventory is always 30x of the following month's cost of goods sold. 3. All merchandise purchoses ore on account. Thinty percent of all purchases are paid for in the month of purchase and 70x are paid for in the following month, All of the September 30 accounts payable to suppliers wilt be paid during October. 4. Selling and administrative expenses for October are budgeted at 578.000 , exclusive af depreciation. These expenses will be naia in cash Depreciation is budgeted at $2,000 for the month. Required: 1. Using the information provided, calculate or prepare the following: a. The budgeted cash collections for October: b. The budgeted merchandise purchases for October. c. The budgeted cash disbursements for merchandise purchases for Octobet. d. The budgeted net operating income for October e. A budgeted balance sheet at October 31 . 2. Assume the following changes to the underlying budgeting assumptions: (i) 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month. (2) the ending merchandise inventory is always 10% of the following month's cost of goods sold, and (3) 20% of all purchases are pald for in the month of purctiase and 80% are paid for in the following month. Using these new assumptions, calculate or prepare the following: a. The budgeted cash collections for October: b. The budgeted merchandise purchases for October: c. The budgeted cash disbursements for merchandise purchases for October. d. Net operating income for the month of October: e. A budgeted balance sheet ot October 31