ork Saved Wheeling Company is a merchandiser that provided a balance sheet as of
ID: 2522508 • Letter: O
Question
ork Saved 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 s 77800 134,000 62100 284,000 $ 557,900 $225,900 216,000 116,000 557,900 The company is in the process of preparing a budget for October and has assembled the following data: 1 Sales are budgeted at $460,000 for October and $470,000 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 remaning 60? collected in the following month. All of the September 30 accounts receivable will be collected in October 2 The budgeted cost of goods sold is always 45% of sales ond the ending merchandise inventory is eweys 30% of the follow ng month's cost of goods sold 3. 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 4 Selling and administrative expenses for October are budgeted at $81.400, exclusive of depreciation. These expenses wial be paid in cosh. Depreciation is budgeted at $2.840 for the month. Required: 1. Using the information provided, calculate or prepare the following a. The budgeted cosh collections for October b. The budgeted merchandise purchases for October c. The budgeted cosh disbursements for merchandise purchases for October d The budgeted net opereting income for October S Prey 4 of 4Explanation / Answer
Answer 1-a Sales Budget Oct Nov Sales 460,000 470,000 Cash Sales - 35% 161,000 164,500 Credit Sales - 65% 299,000 305,500 Budgeted Cash Collections Oct Cash Sales 161,000 Collection from Accounts Receivables Accounts Receivables - Sep 134,000 Oct Sales - $195,000 X 40% 119,600 Total cash Collections 414,600 Answer 1-b. Merchandise Purchase Budget Oct Nov Cost of Goods Sold - 45% of Sales 207,000 211,500 Add: Ending Inventory - $211,500 X 30% 63,450 Total Needs 270,450 Less: opening Inventory (62,100) Required Purchases 208,350 Answer 1-c. Schedule of Cash payments to Suppliers Oct Cash Payment Accounts Payable - Sep 225,900 Oct Purchases - $208,350 X 30% 62,505 Total Cash Payment to Suppliers 288,405 Cash budget Oct Opening cash Balance 77,800 Add: receipts Collection from Customers 414,600 Total Cash available 492,400 Less: Disbursements Cash Disbursement - Accounts Payable 288,405 Selling & Admn. Exp. 81,400 Total Disbursement 369,805 Cash Balance Closing 122,595 Answer 1-d. Income Statement For the Month Ending Oct 31 Sales 460,000 Less: Cost of Goods Sold - 45% of sales 207,000 Gross Margin 253,000 Less: Selling & Admn. Exp. 84,240 Net Income 168,760 Answer 1-e. Balance Sheet As on Oct 31 Assets Current Assets Cash 122,595 Accounts receivables 179,400 Inventory 63,450 365,445 Fixed Assets Building & Equipment - $284,000 - $2,840 281,160 Total Assets 646,605 Liabilities Accounts Payable 145,845 Total liabilities 145,845 Shareholders's Equity Common Stock 216,000 Retained Earnings 284,760 Total Stockholders equity 500,760 Total liabilities & Stockholders' Equity 646,605 Schedule of Retained Earnings As on Oct 31 Opening Balance 116,000 Add: net income 168,760 Closing Balance 284,760 As per Chegg Guidelines, you can ask 1 question having four sub-parts. For other part, please ask it again.
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