QUESTION 7 Welnor Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: o Sales are budgeted at $320,000 for November, $340,000 for December, and $330,000 for January. o Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible. o The cost of goods sold is 65% of sales. o The company desires ending merchandise inventory to equal 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $21,000. o Monthly depreciation is $16,000. olgnore taxes. Statement of Financial Position October 31 Assets Cash Accounts receivable (net of allowance for uncollectible accounts)............... Merchandise inventory..... Property, plant and equipment (net of $658,000 accumulated depreciation).............. Total assets $22,000 82,000 166,400 1,170,000 $1,440,400 Liabilities and Stockholders' Equity Accounts payable.... Common stock .......... Retained earnings. Total liabilities and stockholders' equity ....... $199,000 840,000 401,400 $1,440,400 Required: a. Prepare a Schedule of Expected Cash Collections for November and December b. Prepare a Merchandise Purchases Budget for November and December. C. Prepare Cash Budgets for November and December d. Prepare Budgeted Income Statements for November and December e. Prepare a Budgeted Balance Sheet for the end of December