Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
|
Month
|
October
|
November
|
December
|
January
|
|
Sales in Units
|
30,000
|
25,000
|
40,000
|
30,000
|
-
Collections are expected to be 70% in the month of sale, 30% in the month following the sale.
-
The A/R balance at September 30th will be collected in full in October.
-
The cost of the merchandise is $28 per unit.
-
In addition to meeting the current month's sales demand, management wants to maintain and ending inventory balance of 10% of the next month's sales.
-
The ending inventory balance at September 30th is 3,000 units.
-
Payment for merchandise is made as follows:½ paid in the month of the purchase, ½ paid the month following the purchase.
-
The A/P balance at September 30th will be paid in full in October.
-
Other monthly expenses to be paid in cash are $300,000.
|
Balance Sheet
|
|
|
September 30
|
|
|
|
|
|
Assets
|
|
|
Cash.............................................................................................
|
$ 16,000
|
|
Accounts receivable.....................................................................
|
250,000
|
|
Inventory.....................................................................................
|
84,000
|
|
Property, plant and equipment
(net of $500,000 accumulated depreciation)............................
|
980,400
|
|
Total assets...................................................................................
|
$1,330,400
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
Accounts payable.........................................................................
|
$ 40,000
|
|
Common stock.............................................................................
|
840,000
|
|
Retained earnings........................................................................
|
450,400
|
|
Total liabilities and stockholders' equity.....................................
|
$1,330,400
|
Required:
-
Prepare a Sales Budget for October, November and December.
-
Prepare a Schedule of Expected Cash Collections for October, November and December.
-
Prepare a Merchandise Purchases Budget for October, November and December.
-
Prepare a Schedule of Expected Cash Disbursements for October, November and December.
-
Prepare Cash Budgets for October, November and December.