Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to the industry….

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to the 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.

Statement of Financial Position

October 31

Assets

Cash ………………………………………………………………………………… $ 16,000

Accounts receivable

(net of allowance for uncollectible accounts) …………………….. 74,000

Inventory …………………………………………………………………………. 140,400

Property, plant and equipment

(net of $500,000 accumulated depreciation) ……………………… 1,066,000

Total assets ………………………………………………………………………. $1,296,400

Liabilities and Stockholders’ Equity

Accounts payable ……………………………………………………………… $ 240,000

Common stock ………………………………………………………………….. 640,000

Retained earnings ……………………………………………………………… 416,400

Total liabilities and stockholders’ equity ……………………………… $1,296,400

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