Asked by Desmond Teddy on May 18, 2024
Verified
Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:Sales are budgeted at $350,000 for November, $370,000 for December, and $360,000 for January.Collections are expected to be 80% in the month of sale and 20% in the month following the sale.The cost of goods sold is 69% of sales.The company desires an ending merchandise inventory equal to 80% of the cost of goods sold in the following month.Payment for merchandise is made in the month following the purchase.Other monthly expenses to be paid in cash are $20,100.Monthly depreciation is $19,900.Ignore taxes.
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.
Industrial Gas
Gases produced for use in industrial processes, such as oxygen for steel-making or nitrogen and argon for welding.
Merchandise Inventory
Items held for sale in the ordinary course of business, often quantified for accounting and operational purposes.
Monthly Depreciation
The portion of a tangible asset's cost that is allocated as an expense over a month, reflecting the asset's usage and wear and tear.
- Formulate extensive master budgets that encompass sales, production, and financial forecasting.
- Evaluate projected income statements and balance sheets for strategic preparation.
Verified Answer
b.
c.
d.
e.
Learning Objectives
- Formulate extensive master budgets that encompass sales, production, and financial forecasting.
- Evaluate projected income statements and balance sheets for strategic preparation.
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