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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 70% of sales.
  • The company desires an ending merchandise inventory equal to 85% 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 $20,000.
  • Monthly depreciation is $19,800.
  • Ignore taxes

Balance Sheet October 31
Assets
Cash $ 20,800
Accounts receivable 81,800
Merchandise inventory 214,200
Property, plant and equipment (net of $584,000 accumulated depreciation) 994,000
Total assets $ 1,310,800
Liabilities and Stockholders' Equity
Accounts payable $ 194,800
Common stock 490,000
Retained earnings 626,000
Total liabilities and stockholders' equity $ 1,310,800

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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