Weldon industrial gas corporation supplies acetylene

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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. Brewer, Introduction to Managerial Accounting, 3/e 151
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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:   Brewer, Introduction to Managerial Accounting, 3/e 152
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126. Caprice Corporation is a wholesaler of industrial goods. Data regarding the store’s operations  follow: Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. Collections are expected to be 80% in the month of sale, 16% in the month following the sale, and 4% uncollectible. The cost of goods sold is 70% 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. The November beginning balance in the accounts receivable account is $78,000. The November beginning balance in the accounts payable account is $254,000. Required: (a.) Prepare a Schedule of Expected Cash Collections for November and December. (b.) Prepare a Merchandise Purchases Budget for November and December. Level: Medium    LO:  2,3 Brewer, Introduction to Managerial Accounting, 3/e 153
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Ans: 127. Rehmer Corporation is working on its direct labor budget for the next two months. Each unit of  output requires 0.61 direct labor-hours. The direct labor rate is $8.90 per direct labor-hour. The  production budget calls for producing 2,600 units in July and 2,100 units in July. Required: Construct the direct labor budget for the next two months, assuming that the direct labor work force is  fully adjusted to the total direct labor-hours needed each month. Level: Easy    LO:  5     Ans:   128. Kouba Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.23 direct labor-hours. The direct labor rate is $11.20 per direct labor-hour. The production  budget calls for producing 4,000 units in April and 3,400 units in May. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means 
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