Question

Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:

• Sales are budgeted at $410,000 for November, $420,000 for December, and $400,000 for January.
• Collections are expected to be 65% in the month of sale and 35% in the month following the sale.
• The cost of goods sold is 60% of sales.
• The company desires an ending merchandise inventory equal to 45% of the cost of goods sold in the following month. Payment for merchandise is made in the month following the purchase.
• The November beginning balance in the accounts receivable account is $76,000.
• The November beginning balance in the accounts payable account is $263,000.

Required:

a. Prepare a Schedule of Expected Cash Collections for November and December.

b. Prepare a Merchandise Purchases Budget for November and December.

repare a Schedule of Expected Cash Collections for November and December.

	November December Sales Schedule of Expected Cash Collections Accounts receivable November sales December sales Total cash collections

Prepare a Merchandise Purchases Budget for November and December.

	Merchandise Purchases Budget November December Cost of goods sold Total needs 0 0 Required purchases $0 $

Answer 1