Asked by Talia Miller on Jun 08, 2024
Verified
Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry.Data regarding the store's operations follow:
o Sales are budgeted at $330,000 for November, $300,000 for December, and $320,000 for January.
o Collections are expected to be 85% in the month of sale and 15% in the month following the sale.
o The cost of goods sold is 60% of sales.
o The company desires an ending merchandise inventory equal to 80% of the cost of goods sold in the following month.
o Payment for merchandise is made in the month following the purchase.
o Other monthly expenses to be paid in cash are $21,200.
o Monthly depreciation is $21,000.
o 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.
Cash Collections
The process of gathering all cash receipts from sales or other sources during a particular period.
Merchandise Purchases Budget
A financial plan that estimates the cost of goods a company needs to purchase to meet its sales goals.
Cash Budget
A financial plan that estimates cash inflows and outflows over a specific period of time, primarily used to assess whether a company has sufficient cash to fulfill its operations and financial commitments.
- Appraise the factors and arrangement for a direct labor budget.
Verified Answer
EK
e. 
Learning Objectives
- Appraise the factors and arrangement for a direct labor budget.