Reference no: EM132702940

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

• Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January.
• Collections are expected to be 80% in the month of sale, 16% in the month following the sale, and 4% uncollectible.
• The cost of goods sold is 10% of sales.
• The company desires an ending merchandise equal to 60% of the cost of goods sold in the following month. Payment for merchandise is made in the month following the purchase.
•  The November depreciation is $48,000.
•  The November estimated tax payable is 573,001
•  Selling and administrative expenses will amount to $100,000 per month.
• The November beginning balance in the accounts receivable account is $33,000.
• The November beginning balance in the accounts payable account is $254,000, which will be paid in December.

Required:

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

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

Problem c) Discuss any TWO bene?ts that organizations gain from using budgetary planning systems