Weldon 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 $350,000 for January.
· Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.
· The cost of goods sold is 65% of sales.
· The company purchases 60% of its merchandise in the month prior to the month of sale and 40% in the month of sale. 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 $20,000.
· Ignore taxes.
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.
SOLUTION PREVIEW
|
A
|
Cash Collections
|
November
|
December
|
|
|
Sales
|
$360,000
|
$380,000
|
|
|
75% in the same month
|
270,000
|
285,000
|
|
|
20% of previous month’s sales
|
74000
|
72000
|
|
|
Total cash
collected
|
344000
|
357000
|
File name:
Weldon-Industrial-Gas-Corporation.doc File type: application/msword Price:
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