Question
Capp Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow: Sales are budgeted at $350,000 for November, $360,000 for December, and
Capp Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow: |
Sales are budgeted at $350,000 for November, $360,000 for December, and $340,000 for January. | |
Collections are expected to be 60% in the month of sale, 39% in the month following the sale, and 1% uncollectible. | |
The cost of goods sold is 75% of sales. | |
The company desires an ending merchandise inventory equal to 40% 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 $70,000. | |
The November beginning balance in the accounts payable account is $257,000. |
Required: |
a. | Prepare a Schedule of Expected Cash Collections for November and December. (Omit the "$" 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 | $ | $ | |
(Click to select)DeductAdd: (Click to select)Beginning merchandise inventoryDesired ending merchandising inventory | |||
Total needs | |||
(Click to select)DeductAdd: (Click to select)Beginning merchandise inventoryDesired ending merchandising inventory | |||
Required purchase | $ | $ | |
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