TB Problem Qu. 09-154 Caprice Corporation is a wholesaler of industrial goods...   Caprice Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:   Sales are budgeted at $320,000 for November, $330,000 for December, and $310,000 for January. Collections are expected to be 40% in the month of sale, 59% in the month following the sale, and 1% uncollectible. The cost of goods sold is 75% of sales. The company desires an ending merchandise inventory equal to 20% 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 $67,000. The November beginning balance in the accounts payable account is $254,000. Required: a. Prepare a Schedule of Expected Cash Collections for November and December.     b. Prepare a Merchandise Purchases Budget for November and December.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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TB Problem Qu. 09-154 Caprice Corporation is a wholesaler of industrial goods...

 

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

 

  • Sales are budgeted at $320,000 for November, $330,000 for December, and $310,000 for January.
  • Collections are expected to be 40% in the month of sale, 59% in the month following the sale, and 1% uncollectible.
  • The cost of goods sold is 75% of sales.
  • The company desires an ending merchandise inventory equal to 20% 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 $67,000.
  • The November beginning balance in the accounts payable account is $254,000.


Required:

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

 


 

b. Prepare a Merchandise Purchases Budget for November and December.

 

 

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