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Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operatic 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 77% 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 $20,500. • Monthly depreciation is $20,300. • Ignore taxes. Balance Sheet October 31 Assets Cash 2$ 21,300 Accounts receivable 82,300 202,895 999,000 Merchandise inventory Property, plant and equipment (net of $589,000 accumulated depreciation) Total assets $1,305,495 Liabilities and Stockholders' Equity Accounts payable $ 195,300 Common stock 540,000 Retained earnings 570,195 $1,305,495 Total liabilities and stockholders' equity 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. E and D ecember

Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operatic 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 77% 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 $20,500. • Monthly depreciation is $20,300. • Ignore taxes. Balance Sheet October 31 Assets Cash 2$ 21,300 Accounts receivable 82,300 202,895 999,000 Merchandise inventory Property, plant and equipment (net of $589,000 accumulated depreciation) Total assets $1,305,495 Liabilities and Stockholders' Equity Accounts payable $ 195,300 Common stock 540,000 Retained earnings 570,195 $1,305,495 Total liabilities and stockholders' equity 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. E and D ecember

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 1PA: Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and...
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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 $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 77% 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 $20,500. Monthly depreciation is $20,300. Ignore taxes. Balance Sheet October 31 Assets Cash 21,300 Accounts receivable 82,300 Merchandise inventory 202,895 Property, plant and equipment (net of $589, 000 accumulated depreciation) 999,000 Total assets $1,305,495 Liabilities and Stockholders' Equity $ 195,300 540,000 570,195 Accounts payable Common stock Retained earnings $1,305,495 Total liabilities and stockholders' equity 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. Complete this question by entering your answers in the tabs below. Required B Required C Required D Required E Required A Prepare a Schedule of Expected Cash Collections for November and December.
Transcribed Image Text: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 77% 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 $20,500. Monthly depreciation is $20,300. Ignore taxes. Balance Sheet October 31 Assets Cash 21,300 Accounts receivable 82,300 Merchandise inventory 202,895 Property, plant and equipment (net of $589, 000 accumulated depreciation) 999,000 Total assets $1,305,495 Liabilities and Stockholders' Equity $ 195,300 540,000 570,195 Accounts payable Common stock Retained earnings $1,305,495 Total liabilities and stockholders' equity 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. Complete this question by entering your answers in the tabs below. Required B Required C Required D Required E Required A Prepare a Schedule of Expected Cash Collections for November and December.
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