Welnor Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
Sales are budgeted at $320,000 for November, $340,000 for December, and $330,000 for January.
Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.
The cost of goods sold is 65% of sales.
The company desires ending merchandise inventory to equal 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are $21,000.
Monthly depreciation is $16,000.
Ignore taxes.
Statement of Financial Position
October 31
Assets
Cash $ 22,000
Accounts receivable (net of allowance for uncollectible accounts) 82,000
Merchandise inventory 166,400
Property, plant and equipment (net of $658,000 accumulated depreciation) 1,170,000
Total assets $ 1,440,400
Liabilities and Stockholders' Equity
Accounts payable $ 199,000
Common stock 840,000
Retained earnings 401,400
Total liabilities and stockholders' equity $ 1,440,400
Required:
a.
Prepare a Schedule of Expected Cash Collections for November and December. (Leave no cells blank - be certain to enter "0" wherever required.)
