Welnor Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
- Sales are budgeted at $320,000 for November, $340,000 for December, and $330,000 for January.
- Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.
- The cost of goods sold is 65% of sales.
- The company desires ending merchandise inventory to equal 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
- Other monthly expenses to be paid in cash are $21,000.
- Monthly depreciation is $16,000
- Ignore taxes.
a. Prepare a Schedule of Expected Cash Collections for November and December.
b. Prepare a Merchandise Purchases Budget for November and December.
c. Prepare Cash Budgets for November and December.
d. Prepare Budgeted Income Statements for November and December.
e. Prepare a Budgeted Balance Sheet for the end of December.