Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $310,000 for November, $330,000 for December, and $320,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 70% 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 $21,900. Monthly depreciation is $21,700. Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment (net of $601,000 accumulated depreciation) Total assets $ 22,700 83,700 162,750 1,011,000 $1,280,150 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 196,700 690,000 393,450 $1,280,150 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. Required A Required B Required Required D Required E Required A Required B Required Required D Required E Prepare Budgeted Income Statements for November and December. Prepare a Merchandise Purchases Budget for November and December November December Sales Cost of goods sold November December $ 217,000 S 231,000 173,250 168,000 390,250 399,000 162,750 173.250 $ 227,500 $ 225,750 Budgeted cost of goods sold Add: Desired ending merchandising inventory Total needs Less: Beginning merchandise inventory Required purchases 0 0 Other monthly expenses Depreciation $ 0 $ 0 Required A Required B Required Required D Required E Prepare Cash Budgets for November and December. Required A Required B B Required Required D Required E November December Prepare a Budgeted Balance Sheet for the end of December. Cash disbursements for merchandise Other monthly cash expenses Total cash disbursements $ 0 $ 0 Balance Sheet December 31 Assets Cash 0 0 Beginning cash balance Add cash receipts Total cash available Less cash disbursements Excess (deficiency) of cash available over disbursements Financing Ending cash balance Accounts receivable Inventory Property, plant and equipment (net of accumulated depreciation) Total assets 0 0 $ $ 0 $ 0 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 0
