Operating Budget Review 1: Purchase Budget and Cash Collections Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November, $360,000 for December, and $340,000 for January. Collections are expected to be 85% in the month of sale, 10% in the month following the sale, and 5% uncollectible. The cost of goods sold is 80% 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 $320,000. Required: a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December

Unit Purchase Budget A sales budget is given below for one of the products manufactured by the Key Co.: January.................. 21,000 units February................ 36,000 units March.................... 61,000 units April...................... 41,000 units May....................... 31,000 units June....................... 25,000 units The inventory of finished goods at the end of each month should equal 20% of the next month's sales. However, on December 31 the finished goods inventory totaled only 4,000 units. Each unit of product requires three specialized electrical switches. Since the production of these specialized switches by Key's suppliers is sometimes irregular, the company has a policy of maintaining an ending inventory at the end of each month equal to 30% of the next month's production needs. This requirement had been met on January 1 of the current year. Required: Prepare a budget showing the quantity of switches to be purchased each month for January, February, and March and in total for the quarter.

Simple Rate of Return (Ignore income taxes in this problem.) Ducey Corporation is contemplating purchasing equipment that would increase sales revenues by $79,000 per year and cash operating expenses by $27,000 per year. The equipment would cost $150,000 and have a 6 year life with no salvage value. The annual depreciation would be $25,000. Required: Determine the simple rate of return on the investment to the nearest tenth of a percent. Show your work.