Reference no: EM132894685
Question - Gero Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:
Sales are budgeted at $390,000 for November, $400,000 for December, and $380,000 for January.
Collections are expected to be 55% in the month of sale, 43% in the month following the sale, and 2% uncollectible.
The cost of goods sold is 80% of sales.
The company desires an ending merchandise inventory equal to 35% 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 $74,000.
The November beginning balance in the accounts payable account is $261,000.
Required -
a. Schedule of Expected Cash Collections for November and December.
b. Merchandise Purchases Budget for November and December.
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