Usg the following infomation s Qucstions 4 through 7 other companies. Data regar

Question

Usg the following infomation s Qucstions 4 through 7 other companies. Data regarding November, $320,000 for December Weldon Industrial Gas Corporation supplies compressed gases to Weldon's operations follow Sales are all on account, and they are budgeted at $240,000 for and 5340,000 for January collections are expected to be 75% in the month of sale, 22% in the month following the sale, and 3% uncollectible " The cost of goods sold is 70% of sales. cost of goods sold in made in the . The company desires an ending merchandise inventory equal to 80% of the the following month. Merchandise is bought on account, and payment for merchandise is month following the purchase . Other monthly expenses to be paid in cash are $20,400. Monthly depreciation is $15,400. Ignore taxes 4. How much are Weldon's total cash collections in December? A. $292,800 B. $306,000 C. $297,200 D. $301,600 E. None of the above 5. How much are Weldon's total cash disbursements in December for merchandise purchase? A. $240,160 B. $231,040 C. $234,080 D. $237,120 E. None of the above

Explanation / Answer

Ans A 292800

4 December Sales 320000 Accounts Receivable November sales 52800 December Sales 240000 Total Cash Collections 292800

Ans A 292800

5 November December Budgeted cost of goods sold 182400 243200 Add:Desired ending merchandised inventory 194560 206720 Total needs 376960 449920 Less:Beginning Merchandised Inventory 145920 194560 Required Purchases 231040 255360 Cash Disbursment Cash Disbursment for merchandised 231040 Other monthly cash expenses 20400 Total Cash Disbursment 251440 Ans D none of the above 6 December Budgeted cost of goods sold 243200 Add:Desired ending merchandised inventory 206720 Total needs 449920 Less:Beginning Merchandised Inventory 194560 Required Purchases 255360 Ans B 255360 7 Net operating Income November Sales 240000 Bad Debt expense 7200 Cost of goods sold 182400 Gross margin 50400 other monthly expenses 20400 Depriciation 15400 Net operating Income 14600 Ans A 14600

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