Reference no: EM132478511

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry data regarding the store's operations follow:

Point 1: Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January.

Point 2: Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.

Point 3: The cost of goods sold is 65% of Sales.

Point 4: The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month.

Point 5: Payment for merchandise is made in the month following the purchase.

Point 6: Other monthly expenses to be paid in cash are $21,900.

Point 7: Monthly depreciation is $20,000 Ignore taxes

Balance Sheet October 31

Assests

Cash                                                                                                     $16,000

Accounts receivable (net of allowance for uncollectible accounts)                    $74,000

Merchandise Inventory                                                                             140,400

Property, plant and equipment (net of $500,000 accumulated depreciation       1.066,000

Total assets                                                                                        $1,296,400

Liabilities and stockholders equity

Accounts Payable                                                  $240,000

Common stock                                                      $640,000

Retained earnings                                                 $416,400

Total liabilities and stockholders' equity                 $1,296,400

Question A. How do you make a schedule of expected cash collections for November and December

Question B. How do you make a merchandise purchases budget for November and December

Question C. Prepare Cash budgets for November and December.