Exercise $8-17($Algo$)$ Cash Flows; Budgeted Income Statement and Balance Sheet $[$LO$8-2,$ LO$8-3,$ LO$8-4,$ LO$8-9,$ LO$8-10]$

Wheeling Company is a merchandiser that provided a balance sheet as of September $30$ as shown below:

Wheeling Company

Balance Sheet

September $30$

Assets

Cash $ $70,600$

Accounts receivable $118,000$

Inventory $51,300$

Buildings and equipment, net of depreciation $244,000$

Total assets $ $483,900$

Liabilities and Stockholders$$ Equity

Accounts payable $ $119,900$

Common stock $216,000$

Retained earnings $148,000$

Total liabilities and stockholders$$ equity $ $483,900$

The company is in the process of preparing a budget for October and has assembled the following data:

Sales are budgeted at $$380,000$ for October and $$390,000$ for November. Of these sales, $35\%$ will be for cash; the remainder will be credit sales. Forty percent of a month$$s credit sales are collected in the month the sales are made, and the remaining $60\%$ is collected in the following month. All of the September $30$ accounts receivable will be collected in October.

The budgeted cost of goods sold is always $45\%$ of sales and the ending merchandise inventory is always $30\%$ of the following month$$s cost of goods sold.

All merchandise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and $70\%$ are paid for in the following month. All of the September $30$ accounts payable to suppliers will be paid during October.

Selling and administrative expenses for October are budgeted at $$79,600,$ exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $$2,440$ for the month.

Required:

Using the information provided, calculate or prepare the following:

The budgeted cash collections for October.

The budgeted merchandise purchases for October.

The budgeted cash disbursements for merchandise purchases for October.

The budgeted net operating income for October.

A budgeted balance sheet at October $31.$

Assume the following changes to the underlying budgeting assumptions:

$(1)50\%$ of a month$$s credit sales are collected in the month the sales are made and the remaining $50\%$ is collected in the following month, $(2)$ the ending merchandise inventory is always $10\%$ of the following month$$s cost of goods sold, and $(3)20\%$ of all purchases are paid for in the month of purchase and $80\%$ are paid for in the following month. Using these new assumptions, calculate or prepare the following:

The budgeted cash collections for October.

The budgeted merchandise purchases for October.

The budgeted cash disbursements for merchandise purchases for October.

Net operating income for the month of October.

A budgeted balance sheet at October $31.$