TB Problem Qu. 8-224 (Algo) Weller Industrial Gas Corporation. Weller Industrial Gas Corporation supplies acetylene and other compressed gases to


TB Problem Qu. 8-224 (Algo) Weller Industrial Gas Corporation. Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store’s operations follow: Sales are budgeted at $300,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 75% in the month of sale and 25% in the month following the sale. The cost of goods sold is 76% 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 $20,600. Monthly depreciation is $20,400. Ignore taxes. Balance Sheet October 31 Assets Cash $ 21,400 Accounts receivable 82,400 Merchandise inventory 182,400 Property, plant and equipment (net of $590,000 accumulated depreciation) 1,000,000 Total assets $ 1,286,200 Liabilities and Stockholders’ Equity Accounts payable $ 195,400 Common stock 550,000 Retained earnings 540,800 Total liabilities and stockholders’ equity $ 1,286,200 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.


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