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.