Technology Company Limited sells computers and accessories. Data of the store's operations are as follow:

• Sales are budgeted at $400,000 for December 2019, $420,000 for January 2020, and $410,000 for February 2020.

• Collections are expected to be 80% in the month of sale, 18% in the month following the sale, and 2% uncollectible will be recorded as bad debt expense.

• The cost of goods sold is 58% of sales.

• The company purchases 70% of its merchandise in the month prior to the month of sale and

  30% in the month of sale. Payment for inventory is made in the month following the

purchase.

• Other monthly expenses to be paid in cash are $16,000.

• Depreciation is $18,000 per month.

• Other information as at 30 Nov 2019:

  Accounts receivable (net of allowance for uncollectible accounts) Cash Accounts payable

$76,000

$49,000 $190,000

• Ignore taxes.

• There are inventories at end of November.

  Required:

  Use this table format (at least 5 columns) for part a. and bi.

Item

% working

% working

Dec 2019 Amount ($)

Jan 2020 Amount ($)

a. Prepare a Schedule of Expected Cash Collection from sales for December 2019 and January 2020. (8 marks)

bi. Prepare a Merchandise Purchases Budget for December 2019 and January 2020. (Hint: COGS, Sales) (12 marks)

bii. Find the disbursements for merchandise for Dec 2019 and Jan 2020. (4 marks)