[javabha]

Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

• Sales are budgeted at $330,000 for November, $300,000 for December, and $320,000 for January.
• Collections are expected to be 85% in the month of sale, 14% in the month following the sale, and 1% uncollectible.
• The cost of goods sold is 60% of sales.
• The company purchases 80% of its merchandise in the month prior to the month of sale and 20% in the month of sale. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $21,200.
• Monthly depreciation is $21,000.
• Ignore taxes.

Statement of Financial Position
October 31
Assets:
Cash $ 22,000
Accounts receivable (net of allowance for uncollectible accounts) 83,000
Inventory 158,400
Property, plant and equipment (net of $594,000 accumulated depreciation) 1,004,000
Total assets $1,267,400

Liabilities and Stockholders' Equity:
Accounts payable $ 196,000
Common stock 620,000
Retained earnings 451,400
Total liabilities and stockholders' equity $1,267,400

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.