wheeling Company merchandise? tnst provided 5 b5ance ,neet of September 30shown
ID: 2609994 • Letter: W
Question
wheeling Company merchandise? tnst provided 5 b5ance ,neet of September 30shown below. Wheeling Company Bslance Sheet S 62600 06,000 nventor Butldinga and equipment, net of deprec stian Totsl assets 235,000 446,800 isbilities and Stockholders' Equlty Accounts psysble Common stack Reta ned earning Totsl lisbilites and stockholdera equity S 121,800 216,000 The company ls In the process of preparing s budget for October and has sssembled the fol lawing dsts t Soes ner busgetea 5:5320.000 for October 5na S330.000 for Novembec Of tnese so es. 35% will b for cean; the remainder wil credit s. es Fo ty percent of month's credt ssies 5 e collecteo tne month thesa es ser ace·and tne remaining 60% ce collected in the fallowlng month. All of the Seatember 30 accounts rece able will be col ected In October 2 Te budgeted cost of gooossold ys 45% of g5les 5na the ending mercnandise trmentory |& ys 30% of the following month's cost of goodssold 3. Al merchandse purcnses 5re on eccount Thirty percent of all purchases 5re P5lo for In the montn of purcnse end 70% ne pid for In the following montih. All af the September 30 sccounta payeble to supplers will be pd during October 4 Seling eno omínlatrette excenses for Octocer ne budgetea$94,200, exclusive of ceprecetion. These expenses will ce peld n cash. Depreclation ls budgeted at $2,350 for the month. Required: 1. Uaing the nformation provided, calcuiste or prepsre the folawing . The budgeted cash collections for October c. The budgeted cssh disbursements for merchandise purchsses for October d. The budgeted net operating Income for October e. A budgeted balance sheet st October 3 2 Assume the following changes to the underying budgeting ssumptions (1) 50% of 5 month's credt ”les 5e colected In tne month the asies are m5ce 5nd the remaining 50% colectea 1n the following month. (2) the ending mercnanalae Inventory ways 10% of the following month's cost of gooossold, and (3) 20% of all purchses ne Paid for in the month of purcheaand 80% se paio for in the following month, using thesnew ssumotions, calculst or prepar the folowlng a The budgeted cesh collectians for October . The budgeted merchandise purchsses for October c. The budgeted cssh disbursements for merchandise purchsses for October d. Net opersting Income for the month of October. e. A budgeted balance sheet st October 31 Complete this question by antaring your aniwers in the tabs balow. Prepare a budoeted balance sheet at October 31 Balanoe sheet Total assats Liabil ec and Btookholderd Equty a lables and stockholders, aityExplanation / Answer
Revised 2C, 2D and 2E are given below.
1. a. Budgeted cash collection for October Details October September sales 106000 October sales 112000 (35% of $320,000) Total Cash collections 218000 b. Budgeted purchase of October Details October Budgeted sales 320000 Cost of goods sold(45% of sales) 144000 Add: Ending Inventory 44550 (30% of next months cost ) Desired inventory 188550 Less: Beginning inventory 43200 Budgeted purchases 145350 c. Budgeted cash disbursement for purchases Details October September purchases 121800 October purchases 43605 (30% of $145,350) Cash disbursement for purchases 165405 d. Budgeted net operating income Sales 320000 Cost of goods sold 144000 Gross profit 176000 Selling and administrative exp. Selling and administrative exp. 94200 Depreciation 2350 96550 Net operating income * 79450 e. Budgeted Balance Sheet Assets Cash ** 20995 Accounts Receivables 208000 Inventory 44550 Building and equipment, net 232650 Total Assets 506195 Liabilities and equity Accounts Payable 101745 Common stock 216000 Retained earnings Beginning Balance 109000 Net Income for the month * 79450 188450 Total liabilities and equity 506195 Cash Budget Beginning Balance 62600 Collection from Sales 218000 Cash available for disbursements 280600 Cash disbursements: For purchases 165405 For selling and administrative exp. 94200 Total cash disbursements 259605 Ending Balance ** 20995Related Questions
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