Reference no: EM132860251
Question - Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:
Sales are budgeted at $330,000 for November, $340,000 for December, and $320,000 for January.
Collections are expected to be 60% in the month of sale and 40% 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 $68,000.
The November beginning balance in the accounts payable account is $255,000.
Required -
a. Schedule of Expected Cash Collections for November and December.
b. Merchandise Purchases Budget for November and December.