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

• Sales are budgeted at $400,000 for November, $410,000 for December, and $390,000 for January.
• Collections are expected to be 60% in the month of sale, 37% in the month following the sale, and 3% uncollectible.
• The cost of goods sold is 75% 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 November beginning balance in the accounts receivable account is $75,000.
• The November beginning balance in the accounts payable account is $262,000.

Prepare a Merchandise Purchases Budget for November and December.

CAPRICE CORPORATIONMerchandise Purchases BudgetNovemberDecemberCost of goods sold$

280,000$

287,000Add: Desired ending merchandising inventory114,800117,000Total needsDeduct: Beginning merchandise inventoryRequired purchases