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. (Omit the "$" sign in your response.)


Welnor Industrial Gas Corporation
Schedule of Expected Cash Collections
 	November	December
  Sales	$
320,000
  	$
340,000

  Schedule of Expected Cash Collections
  Accounts receivable	$
82,000

  November sales
240,000
  	$
64,000

  December sales
255,000




  Total cash collections	$
322,000
  	$
319,000







b.
Prepare a Merchandise Purchases Budget for November and December. (Input all amounts as positive values. Do not round intermediate calculations. Omit the "$" sign in your response.)


Welnor Industrial Gas Corporation
Merchandise Purchases Budget
 	November	December
  Budgeted cost of goods sold	$
208,000
  	$
221,000

  :
176,800

171,600




  Total needs
384,800

392,600

  :
166,400

176,800




  Required purchase	$
218,400
  	$
215,800







c.
Prepare Cash Budgets for November and December. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Omit the "$" sign in your response.)


Welnor Industrial Gas Corporation
Cash Budget
 	November	December
  Cash disbursements for merchandise	$
199,000
  	$
218,400

  Other monthly cash expenses
21,000

21,000




  Total cash disbursements	$
220,000
  	$
239,400




  Cash balance, beginning	$
22,000
  	$
124,000

  Add cash receipts
322,000

319,000




  Total cash available
344,000

443,000

  Less cash disbursement
220,000

239,400




  Excess (deficiency) of cash available
  over disbursements
124,000

203,600

  Financing
0

0




  Cash balance, ending	$
124,000
  	$
203,600