Asked by Brianna Weidaman on May 16, 2024
Verified
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 and 15% in the month following the sale.The cost of goods sold is 80% of sales.The company desires an ending merchandise inventory equal to 40% 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 $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.
Schedule of Expected Cash Collections
A financial report that outlines the anticipated inflow of cash from receivables or other income sources over a specific time period.
Merchandise Purchases Budget
A financial plan that estimates the cost of goods a retail company needs to purchase over a specific period to meet expected sales.
Cost of Goods Sold
Costs directly tied to the creation of products sold by a company, encompassing both materials and labor expenses.
- Compute and examine projected sales figures using the provided data.
- Forecast incoming and outgoing cash to develop a cash budget strategy.
- Determine and compute the expenses associated with acquiring and managing raw materials.
Verified Answer
b.
Learning Objectives
- Compute and examine projected sales figures using the provided data.
- Forecast incoming and outgoing cash to develop a cash budget strategy.
- Determine and compute the expenses associated with acquiring and managing raw materials.
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