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.

Answer rating: 100% (QA)

ANSWER Schedule of Expected Cash collection Here Sales collections term is 75 of sales to be collected in the same month and 25 in following month Hen... View the full answer