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oints) Weldon Industrial Gas Corporation supplies acetylene and other ompressed gases to industry. Data regarding the store's operations follow: - The company sells each unit
oints) Weldon Industrial Gas Corporation supplies acetylene and other ompressed gases to industry. Data regarding the store's operations follow: - The company sells each unit for $55. Budoeted Sales: - 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 $43 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 beginning inventory balance at October 1 st is 3,200 units. - Payment for merchandise is made as follows: 1/2 paid in the month of the purchase, 1/2 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 $550,000. - Minimum cash balance is $100,000. - The company has a line of credit for $500,000 at an annual interest rate of 12%. You can borrow any amount to get to the minimum of $100,000. - Loans are taken out on first day of month borrowed and repaid at the end of the quarter with interest. Balance Sheet September 30 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. c. Prepare a Merchandise Purchases Budget for October, November, December, and Quarter. d. Prepare a Schedule of Expected Cash Disbursements for October, November, December, and Quarter. e. Prepare Cash Budgets for October, November, December, and Quarter. Gohadula nf Frnantad Cach rollantions Schedule of Expected Cash Disbursements \begin{tabular}{|l|l|l|l|l|} \hline & October & November & December & Quarter \\ \hline Beginning A/P & $300,000 & & & \\ \hline October Purchases & & & & \\ \hline November Purchases & & & & \\ \hline December Purchases & & & & \\ \hline Total & & & & \\ \hline \end{tabular} Cash Budget \begin{tabular}{|l|l|l|l|l|} \hline & October & November & December & Quarter \\ \hline Beginning Cash bal. & $100,000 & & & \\ \hline +Cash collections & & & & \\ \hline =Cash Available & & & & \\ \hline Less: Cash Disburse. & & & & \\ \hline For Purchases & & & & \\ \hline Dividend & & & & \\ \hline =Totalcashdisburse. & & & & \\ \hline Excess/(Deficiency) & & & & \\ \hline Borrowing & & & & \\ \hline Repayment & & & & \\ \hline Interest & & & & \\ \hline Ending Cash bal. & & & & \\ \hline \end{tabular}
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