TB Problem Qu. 8-209 (Algo) Weller Industrial Gas Corporation...

Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

• Sales are budgeted at $360,000 for November, $380,000 for December, and $370,000 for January.
• Collections are expected to be 75% in the month of sale and 25% in the month following the sale.
• The cost of goods sold is 74% of sales.
• The company desires an ending merchandise inventory equal to 75% of the cost of goods sold in the following month.
• Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $22,400.
• Monthly depreciation is $22,200.
• Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$ 23,200
Accounts receivable	84,200
Merchandise inventory	199,800
Property, plant and equipment (net of $606,000 accumulated depreciation)	1,016,000
Total assets	$ 1,323,200
Liabilities and Stockholders' Equity
Accounts payable	$ 197,200
Common stock	610,000
Retained earnings	516,000
Total liabilities and stockholders' equity	$ 1,323,200

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.