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Accounting

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

•	Sales are budgeted at $340,000 for November, $350,000 for December, and $330,000 for January.
•	Collections are expected to be 65% in the month of sale, 33% in the month following the sale, and 2% uncollectible.
•	The cost of goods sold is 75% of sales.
•	The company desires an ending merchandise inventory equal to 45% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
•	The November beginning balance in the accounts receivable account is $69,000.
•	The November beginning balance in the accounts payable account is $256,000.

Required:

a.	Prepare a Schedule of Expected Cash Collections for November and December. (Omit the "$" sign in your response.)

Capp Corporation Schedule of Expected Cash Collections
	November	December
Sales	$	$
Schedule of Expected Cash Collections
Accounts receivable	$
November sales		$
December sales

Total cash collections	$	$

b.	Prepare a Merchandise Purchases Budget for November and December. (Input all amounts as positive values. Omit the "$" sign in your response.)

Capp Corporation Merchandise Purchases Budget
	November	December
Budgeted cost of goods sold	$	$
:

Total needs
:

Required purchase	$	$

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9960661

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