Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: The company sells each unit for $55. Budgeted Sales: Month October November December January Sales in Units 32,000 28,000 40,000 30,000 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 months sales demand, management wants to maintain and ending inventory balance of 10% of the next months sales. The beginning inventory balance at October 1st is 3,200 units. Payment for merchandise is made as follows: paid in the month of the purchase, 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 Assets Cash.............................................................................................. $ 100,000 Accounts receivable ..................................................................... 250,000 Inventory ...................................................................................... 137,600 Property, plant and equipment (net of $200,000 accumulated depreciation) ............................ 866,400 Total assets ................................................................................... $1,354,000 Liabilities and Stockholders Equity Accounts payable ......................................................................... $ 300,000 Common stock ............................................................................. 582,000 Retained earnings ......................................................................... 472,000 Total liabilities and stockholders equity ..................................... $1,354,000 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.

Sales Budget October November December Quarter Units Sold Sales Price per unit Total Sales Schedule of Expected Cash Collections October November December Quarter Beginning A/R $250,000 October Sales November Sales December Sales Total Purchases Budget October November December Quarter Budgeted Sales (units) +Desired ending inv. = total needs -Beginning inv. (3,200) =Total Purchases X cost per unit =Total purchase cost Schedule of Expected Cash Disbursements October November December Quarter Beginning A/P $300,000 October Purchases November Purchases December Purchases Total

Cash Budget October November December Quarter Beginning Cash bal. $100,000 +Cash collections =Cash Available Less: Cash Disburse. For Purchases Dividend =Total cash disburse. Excess/(Deficiency) Borrowing Repayment Interest Ending Cash bal.