Capes Corporation is a wholesaler of industrial goods.Data regarding the store's operations follow:
o Sales are budgeted at $390,000 for November,$360,000 for December,and $340,000 for January.
o Collections are expected to be 85% in the month of sale and 15% in the month following the sale.
o The cost of goods sold is 80% of sales.
o 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.
o The November beginning balance in the accounts receivable account is $77,000.
o 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.

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The Answer of Capes Corporation is a wholesaler of industrial goods.Data regarding the store's operations follow:
o Sales are budgeted at $390,000 for November,$360,000 for December,and $340,000 for January.
o Collections are expected to be 85% in the month of sale and 15% in the month following the sale.
o The cost of goods sold is 80% of sales.
o 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.
o The November beginning balance in the accounts receivable account is $77,000.
o 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