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Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $300,000 for November,
Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $300,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 75% in the month of sale, 23% in the month following the sale, and 2% uncollectible. The cost of goods sold is 75% of sales The company desires an ending merchandise inventory equal to 70% 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 $21,600 Monthly depreciation is $16,600. Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable (net of allowance for uncollectible accounts) Merchandise Inventory $ 22,600 82,600 157,500 Property, plant and equipment (net of $664,000 accumulated depreciation 1,70,000 Total assets 1,432,700 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $ 199,600 900,000 333,100 Total liabilities and stockholders' equity $1,432,700
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