Solution-Schedule of expected cash collections for november

Schedule of expected cash collections for november

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Reference no: EM13518965

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

Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 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 purchases 60% of its merchandise in the month prior to the month of sale and 40% in the month of sale. Payment for merchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are $21,900.

Monthly depreciation is $20,000.
Ignore taxes.

Statement of Financial Position

October 31

Assets

Cash	$ 16,000
Accounts receivable
(net of allowance for uncollectible accounts)	74,000
Inventory	140,400
Property, plant and equipment
(net of $500,000 accumulated depreciation)	1,066,000
Total assets	$1,296,400

Liabilities and Stockholders' Equity

Accounts payable	$ 240,000
Common stock	640,000
Retained earnings	416,400
Total liabilities and stockholders' equity	$1,296,400

Required:

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.

Reference no: EM13518965

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Schedule of expected cash collections for november

Reference no: EM13518965

Reference no: EM13518965

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