M30B:

MANAGERIAL ACCOUNTING

PRACTICE FINAL EXAM (Chapters 8, 9 and 12)

CHAPTER 8

1.

Capid Corporation is a wholesaler of industrial goods. Data regarding the store's

operations follow:

Sales are budgeted at $360,000 for November, $330,000 for December, and

$320,000 for January.

Collections are expected to be 60% in the month of sale, 36% in the month

following the sale, and 4% uncollectible.

The cost of goods sold is 75% of sales.

The company purchases 40% of its merchandise in the month prior to the month

of sale and 60% in the month of sale. Payment for merchandise is made in the

month following the purchase.

The November beginning balance in the accounts receivable account is $77,000.

The November beginning balance in the accounts payable account is $271,000.

Required:

a. Prepare a Schedule of Expected Cash Collections for November and December.

b. Prepare a Merchandise Purchases Budget for November and December