The company desires ending merchandise inventory to equal

Reference no: EM13571000

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.

Reference no: EM13571000

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