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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,

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 Shareholder's Equity
Accounts payable $ 197,200
Common shares 610,000
Retained earnings 516,000
Total liabilities and shareholder's 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.

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