Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:Sales are budgeted at $390,000 for November, $360,000 for December, and $340,000 for January.Collections are expected to be 85% in the month of sale and 15% in the month following the sale.The cost of goods sold is 80% of sales.The company desires an ending merchandise inventory equal to 40% 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 $77,000.The November beginning balance in the accounts payable account is $320,000.Required:a. Prepare a Schedule of Expected Cash Collections for November and December.b. Prepare a Merchandise Purchases Budget for November and December.

Question

Quizplus · Accepted Answer

The Answer of Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:Sales are budgeted at $390,000 for November, $360,000 for December, and $340,000 for January.Collections are expected to be 85% in the month of sale and 15% in the month following the sale.The cost of goods sold is 80% of sales.The company desires an ending merchandise inventory equal to 40% 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 $77,000.The November beginning balance in the accounts payable account is $320,000.Required:a. Prepare a Schedule of Expected Cash Collections for November and December.b. Prepare a Merchandise Purchases Budget for November and December.

Capes Corporation Is a Wholesaler of Industrial Goods