Reference no: EM13568353

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

• The company sells each unit for $45.

• Budgeted Sales:

Month	October	November	December	January
Sales in Units	30,000	25,000	40,000	30,000

• Collections are expected to be 70% in the month of sale, 30% in the month following the sale.

• The A/R balance at September 30th will be collected in full in October.

• The cost of the merchandise is $28 per unit.

• In addition to meeting the current month's sales demand, management wants to maintain and ending inventory balance of 10% of the next month's sales.

• The ending inventory balance at September 30th is 3,000 units.

• Payment for merchandise is made as follows:½ paid in the month of the purchase, ½ paid the month following the purchase.

• The A/P balance at September 30th will be paid in full in October.

• Other monthly expenses to be paid in cash are $300,000.

	Balance Sheet
	September 30
	Assets
	Cash.............................................................................................	$     16,000
	Accounts receivable.....................................................................	250,000
	Inventory.....................................................................................	84,000
	Property, plant and equipment (net of $500,000 accumulated depreciation)............................	980,400
	Total assets...................................................................................	$1,330,400
	Liabilities and Stockholders' Equity
	Accounts payable.........................................................................	$   40,000
	Common stock.............................................................................	840,000
	Retained earnings........................................................................	450,400
	Total liabilities and stockholders' equity.....................................	$1,330,400

Required:

1. Prepare a Sales Budget for October, November and December.

2. Prepare a Schedule of Expected Cash Collections for October, November and December.

3. Prepare a Merchandise Purchases Budget for October, November and December.

4. Prepare a Schedule of Expected Cash Disbursements for October, November and December.

5. Prepare Cash Budgets for October, November and December.