1.Welnor Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
· Sales are budgeted at $352,000 for November, $330,000 for December, and $308,000 for January.
·Collections are expected to be 20% in the month of sale, 70% in the month following the sale, and 10% uncollectible.
· The cost of goods sold is 65% of sales.
· The company desires ending merchandise inventory to equal 40% 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 $90,000.
· Monthly depreciation is $30,000.
· Ignore taxes.
Required:
Headings are NOT required for the following statements
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.