PLEASE ONLY ANSWER QUESTIONS: 1E, 2A, 2C, 2D, AND 2E ANSWERS FOR QUESTIONS: 1A,

Question

PLEASE ONLY ANSWER QUESTIONS: 1E, 2A, 2C, 2D, AND 2E

ANSWERS FOR QUESTIONS: 1A, 1B, 1C, & 1D

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 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 59,000 158,000 78,300 268,000 $563,300 $ 212,800 216,000 134,500 $563,300 The company is in the process of preparing a budget for October and has assembled the following data I. Sales are budgeted at $580,000 for October and $590,000 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 2. The budgeted cost of goods sold is always 45% of sales and the ending merchandise inventory is always 30% of the following 3. All merchandise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and 70% are paid 4. Selling and administrative expenses for October are budgeted at $87,800, exclusive of depreciation. These expenses will be paid in collected in the following month. All of the September 30 accounts receivable will be collected in October month's cost of goods sold for in the following month. All of the September 30 accounts payable to suppliers will be paid during October. cash. Depreciation is budgeted at $2,680 for the month

Explanation / Answer

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.

PART-1

PART-2

1a. Expected Cash Collections October November Total Sales 580000 590000 Accounts Receivable as on 30th September 158000 35% Cash Sale 203000 40% of REMAINDER 40%(580000-203000) 150800 60% of REMAINDER 60%(580000-203000) 226200 Expected Cash Collection 511800 Receivable as on 31st October 226200 1b. Budgeted Merchandise Purchase October November Cost of Goods Sold 45% of Sale 261000 265500 Add: Closing inventory to be kept 30% of foll month 79650 Less: Opening Inventory 78300 79650 Budgeted Merchandise Purchase 262350 185850 1c. Budgeted Cash disbursment for merchandise October November Total Purchase 262350 185850 Accounts Payable as on 30th September 212800 30% paid in the month of Purchase 78705 70% paid in following month 183645 Cash Disbursment 291505 183645 Payable as on 31st October 183645 1d. Net Operating Income Sales Revenue 580000 Less: Cost of Goods Sold -261000 Gross Margin 319000 Less: Selling and Admin 87800 Less: Depreciation 2680 Net Income 228520 1e. Balance Sheet Cash (working-1) 191495 Accounts Receivable (From Cash collection) 226200 Expected cash collection Inventory (From 1b) 79650 Building and Equipment, net of dep (268000-2680) 265320 Total Assets 762665 Accounts Payable 183645 Common Stock 216000 From 1c Retained Earning (134500+228520 Net Income) 363020 Total Liabilities and Equity 762665 Working-1 Schedule for Cash balance: Cash Balance as on 30th September 59000 Add: Cash Collection 511800 Less: Cash Disbursment for Merchandise -291505 Less: Cash Disbursment for Selling Expense -87800 Cash Balance as on 31st October 191495

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.