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gymnast5464
gymnast5464
07.11.2019 • 
Business

Wheeling company is a merchandiser that provided a balance sheet as of september 30 as shown below: wheeling companybalance sheetseptember 30assets cash $ 59,000accounts receivable 90,000inventory 32,400buildings and equipment, net of depreciation 214,000total assets $ 395,400liabilities and stockholders’ equity accounts payable $ 73,000common stock 216,000retained earnings 106,400total liabilities and stockholders’ equity $ 395,400the company is in the process of preparing a budget for october and has assembled the following data: sales are budgeted at $240,000 for october and $250,000 for november. of these sales, 35% will be for cash; the remainder will be credit sales. forty percent of a month’s credit sales are collected in the month the sales are made, and the remaining 60% is collected in the following month. all of the september 30 accounts receivable will be collected in october.the budgeted cost of goods sold is always 45% of sales and the ending merchandise inventory is always 30% of the following month’s cost of goods sold.all merchandise purchases are on account. thirty percent of all purchases are paid for in the month of purchase and 70% are paid for in the following month. all of the september 30 accounts payable to suppliers will be paid during october.selling and administrative expenses for october are budgeted at $78,000, exclusive of depreciation. these expenses will be paid in cash. depreciation is budgeted at $2,000 for the month.required: 1. using the information provided, calculate or prepare the following: a. the budgeted cash collections for october.b. the budgeted merchandise purchases for october.c. the budgeted cash disbursements for merchandise purchases for october.d. the budgeted net operating income for october.e. a budgeted balance sheet at october 31.2. assume the following changes to the underlying budgeting assumptions: (1) 50% of a month’s credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, (2) the ending merchandise inventory is always 10% of the following month’s cost of goods sold, and (3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. using these new assumptions, calculate or prepare the following: a. the budgeted cash collections for october.b. the budgeted merchandise purchases for october.c. the budgeted cash disbursements for merchandise purchases for october.d. the budgeted net operating income for october.e. a budgeted balance sheet at october 31.

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