Weldon Industrial Gas Corporation supplies acetylene and other compressed gases

Question

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

Sales are budgeted at $340,000 for November, $360,000 for December, and $350,000 for January.

Collections are expected to be 75% in the month of sale, 23% in the month following the sale, and 2% uncollectible.

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.

Ignore taxes.

Required:

Prepare a Schedule of Expected Cash Collections for November and December.

Prepare a Merchandise Purchases Budget for November and December. (Input all amounts as positive values. Do not round intermediate calculations.)

Prepare Cash Budgets for November and December. (Input all amounts as positive values.)

Prepare Budgeted Income Statements for November and December.

Prepare a Budgeted Balance Sheet for the end of December.

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

Explanation / Answer

a) Schedule of expected cash collection

b) Calculation of Merchandise Purchases

216000

(75% of following month CGS)

210000

(75% of following month CGS)

c) Preparation of Cash Budget

d) Preperation of Budgeted Income Statement

e) Preperation of Budgeted Balance Sheet on Dec 31

Particulars November December Total Sales 340000 360000 Schedule of expected cash collection Accounts Recceivable collected 81000 78200 Nobember Sales 255000 - December Sales - 270000 Total Cash Collections 336000 348200

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