per unit 2. (12 points) Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to the industry. Data regarding the store's operations follow: The company sells each unit for $45. USE THESE TABLES Budgeted Sales: Month October November December January SALES BUDGET: October November December Quarter Sales in Units 30,000 25,000 40,000 30,000 Units Sold Collections are expected to be 70% in the month of sale, 30% in the month Sales Price following the sale. The A/R balance on September 30th will be collected in full in October. Total Sales The cost of the merchandise is $38 per unit. In addition to meeting the current month's sales demand, management Schedule of October November December Quarter wants to maintain an ending inventory balance of 10% of the next month's Expected Cash sales. Collections: The beginning inventory balance on October 1st is 3,000 units. Payment for merchandise is made as follows: 1 paid in the month of the Beginning A/R $250,000 purchase, % paid the month following the purchase. October Sales The A/P balance on September 30th will be paid in full in October. November Sales A dividend was paid in October for $500,000. December Sales The minimum cash balance is $100,000. Total The company has a line of credit for $500,000 at an annual interest rate of 12%. Loans are taken out on the first day of the month borrowed and repaid at the end of the quarter with interest. Balance Sheet Purchases Budget: October November December Quarter September 30 Assets Budgeted Sales Cash $100,000 (Units) Accounts receivable. 250,000 +Desired ending Inventory 114,000 inv. Property, plant, and equipment = Total Needs (net of $200,000 accumulated depreciation) .866,400 - Beginning inv. (3,000) Total assets $1,330,400 =Total Purchases X cost per unit Liabilities and Stockholders' Equity =Total purchase Accounts payable $ 300,000 cost Common stock .582,000 Retained earnings ..448,400 Total liabilities and stockholders' equity.. $1,330,400 Schedule of Oct. Nov. Dec. Quarter Expected Cash Required: Disbursements: a. Prepare a Sales Budget for October, November, December, and Quarter. Beginning A/P $300,000 b. Prepare a Schedule of Expected Cash Collections for October, November, October December, and Quarter. Purchases c. Prepare a Merchandise Purchases Budget for October, November, December, November and Quarter Purchases d. Prepare a Schedule of Expected Cash Disbursements for October, November, December December, and Quarter. Purchases e. Prepare Cash Budgets for October, November, December, and Quarter. Total
