Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 $ $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

List the different categories of international employees. page 642

Answered: 1 week ago

Question

Explain the legal environments impact on labor relations. page 590

Answered: 1 week ago