Industrial Gas Corporation supplies acetylene and other comp…
Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store’s operations for November follow:The beginning cash balance is $7,500The $15,000 balance in Accounts Receivable on November 1 is from sales on account in October.Sales are budgeted at $310,000 for November.Collections are expected to be 35% in the month of sale, and 65% in the month following the sale.Purchases of merchandise are expected to be $230,000.Payment for merchandise inventory is made 45% in the month of purchase and 55% the following month. The Accounts Payable balance is projected to be zero on November 1.Other monthly expenses to be paid in cash are $35,500.Monthly depreciation is $10,000The desired cash balance at the end of each month is $35,000The company can borrow up to $50,000 from their local bank with interest due the following month.Required:Prepare a cash budget for November. Show your calculations for the numbers you use on the budget.
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