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Caprice 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

Caprice 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 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 $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.

image text in transcribed

CAPRICE CORPORATION Schedule of Expected Cash Collections November December Sales $ 340,000 $ 350,000 Schedule of Expected Cash Collections Accounts receivable November sales December sales Total cash collections

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