An industrial goods wholesaler has provided the following information regarding the budget planning process:

• Sales budgets:
  • November - $190,000
  • December - $160,000
  • January - $140,000
• Cash sales are expected to be 25% of total sales.
• Collections of credit sales are expected to be 85% in the month of sale and 15% in the month following the sale.
• The planned 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 October ending inventory is expected to be $60,000.
• The November beginning balance in the accounts receivable account is $37,000 and is collected in November.
• The November beginning balance in the accounts payable account is $120,000 and is paid in November.

Required:

1. Prepare a Schedule of Expected Cash Collections for November and December. (8)
2. Prepare a Merchandise Purchases Budget and a Schedule of Cash Payments for November and December. (12)
3. What is the accounts receivable balance at the end of December? (2)
4. What is the accounts payable balance at the end of December? (2)