Weldon Industrial Gas Corporation supplies acetylene and oth

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store\'s operations follow: Sales are budgeted at $330,000 for November, $350,000 for December, and $340,000 for January. * Collections are expected to be 80% in the month of sale, 18% in the month following the sale, and 2% uncollectible. The cost of goods sold is 70% of sales. * The company desires an ending merchandise inventory equal to 70% 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 $21,100 Monthly depreciation is $16,100. Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable (net of allowance for uncollectible accounts) Merchandise Inventory Property, plant and equipment (net of $659,000 accumulated depreciation) Total assets $22,100 82,100 161,700 1,170,000 $ 1,435,900 Liabilities and Stockholders\' Equity Accounts payable Common stock Retained eanings Total liabilities and stockholders\' equity $ 199,100 850,000 386,800 $ 1,435,900 Required a. Prepare a Schedule of Expected Cash Collections for November and December WELDON INDUSTRIAL GAS CORPORATION Schedule of Expected Cash Collections November December Sales Schedule of Expected Cash Collections Accounts receivable November sales December sales Total cash collections b. Prepare a Merchandise Purchases Budget for November and December. (Do not round intermediate calculations.) WELDON INDUSTRIAL GAS CORPORATION Merchandise Purchases Budget November December Budgeted cost of goods sold Total needs Required purchases

Solution

SOLUTION

(A)  Schedule of Expected Cash Collections

(B) Merchandise purchase budget

(C) Cash budget

(D) Budgeted Income statement

(E) Budgeted balance sheet

	November ($)	December ($)
Sales	330,000	350,000
Schedule of expected cash collections
Accounts receivable	82,100
November Sales	264,000	59,400
December sales		280,000
Total cash collections	346,200	339,400