Reference no: EM131824206

Question - 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.

Statement of Financial Position October 31
Assets
Cash $22,000
Accounts receivable (net of allowance for uncollectible accounts) 82,000
Merchandise inventory 166,400
PP&E (net of $658,000 accumulated depreciation) 1,170,000
Total Assets $1,440,400
Liabilities & Stockholders' Equity
Accounts payable $199,000
Common stock 840,000
Retained earnings 401,400
Total liabilities & stockholders' equity $1,440,400

Required:

a) Prepare Cash Budgets for November and December.

b) Prepare Cash Budgets for November and December.

c) Prepare Budgeted Income Statements for November and December.

d) Prepare a Budgeted Balance Sheet for the end of December.