124. Bledso Supply Corporation
manufactures and sells cotton gauze. Expected sales of gauze (in boxes) for
upcoming months are as follows:
Management likes to maintain a
finished goods inventory equal to 25% of the next month’s estimated sales.
Required:
Prepare the company’s
production budget for the third quarter of this year (the months of July,
August and September) in good form. Include a column for each month and a total
column for the entire quarter.
Level: Medium LO: 3
Ans:
125. Weldon Industrial Gas
Corporation supplies acetylene and other compressed gases to industry. Data
regarding the store’s operations follow:
Sales are budgeted at $360,000
for November, $380,000 for December, and $350,000 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 purchases 60% of
its merchandise in the month prior to the month of sale and 40% in the month of
sale. Payment for merchandise is made in the month following the purchase.
Other monthly expenses to be
paid in cash are $21,900.
Monthly depreciation is
$20,000.
Ignore taxes.
Required:
(a.) Prepare a Schedule of
Expected Cash Collections for November and December.
(b.) Prepare a Merchandise
Purchases Budget for November and December.
(c.) Prepare Cash Budgets for
November and December.
(d.) Prepare Budgeted Income
Statements for November and December.
(e.) Prepare a Budgeted
Balance Sheet for the end of December.
Level: Hard LO: 2,3,8,9,10
Ans:
