Capp Corporation is a wholesaler of industrial goods. Data regarding the store\'
ID: 2474205 • Letter: C
Question
Capp Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:
Sales are budgeted at $310,000 for November, $320,000 for December, and $300,000 for January.
Collections are expected to be 45% in the month of sale, 53% in the month following the sale, and 2% uncollectible.
The company desires an ending merchandise inventory equal to 25% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
Prepare a Schedule of Expected Cash Collections for November and December. (Omit the "$" sign in your response.)
Prepare a Merchandise Purchases Budget for November and December. (Input all amounts as positive values. Omit the "$" sign in your response.)
Sales are budgeted at $310,000 for November, $320,000 for December, and $300,000 for January.
•Collections are expected to be 45% in the month of sale, 53% in the month following the sale, and 2% uncollectible.
• The cost of goods sold is 60% of sales. •The company desires an ending merchandise inventory equal to 25% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• The November beginning balance in the accounts receivable account is $66,000. • The November beginning balance in the accounts payable account is $253,000.Explanation / Answer
Capp Corporation Schedule of Expected Cash Collections November December Sales $310000 $ 320000 Schedule of Expected Cash Collections Accounts receivable $ 63600 November sales $139500 $ 164300 December sales $ 144000 Total cash collections $ 203100 $ 308300 Capp Corporation Merchandise Purchases Budget November December Budgeted cost of goods sold $ 186000 $192000 Addt: Desired ending merchandising inventory 48000 45000 Total needs 234000 237000 Deduct: Beginning merchandise inventory 46500 48000 Required purchase $187500 $189000