Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:Sales are budgeted at $410,000 for November, $420,000 for December, and $400,000 for January.
Collections are expected to be 65% in the month of sale and 35% in the month following the sale.
The cost of goods sold is 60% of sales.
The company desires an ending merchandise inventory equal to 45% 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 $76,000.
The November beginning balance in the accounts payable account is $263,000.
Required:a. Prepare a Schedule of Expected Cash Collections for November and December.b. Prepare a Merchandise Purchases Budget for November and December. ?NovemberDecemberSales??Schedule of Expected Cash Collections?? Accounts Receivable?? November Sales?? December sales??Total cash collections$342,500?$416,500?Merchandise Purchases BudgetNovemberDecemberCost of goods sold?????Total needs498,000?360,000????Required purchases$387,300?$246,600?
What will be an ideal response?
a.
| ? | November | December |
| Sales | $410,000? | $420,000? |
| Schedule of Expected Cash Collections | ? | ? |
| Accounts Receivable | 76,000? | ? |
| November Sales | 266,500? | 143,500? |
| December sales | ? | 273,000? |
| Total cash collections | $342,500? | $416,500? |
b.
| Merchandise Purchases Budget | November | December |
| Cost of goods sold | $246,000? | $252,000? |
| Add: Desired ending merchandise inventory | 252,000? | 108,000? |
| Total needs | 498,000? | 360,000? |
| Less: Beginning merchandise inventory | 110,700? | 113,400? |
| Required purchases | $387,300? | $246,600? |
You might also like to view...
Compare seasonal effects and cyclical effects
What will be an ideal response?
When the corporate privilege is abused for personal benefit, the courts will require the owners to assume personal liability
a. True b. False Indicate whether the statement is true or false
St. Vincent's, Inc., currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow.ProductPool No.1 (Driver: DLH) Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC)Beta 1,200 45 2,250 Zeta 2,800 55 750 Pool Cost$160,000 $280,000 $360,000 The overhead cost allocated to Zeta by using activity-based costing procedures would be:
A. $240,000. B. $560,000. C. $356,000. D. $444,000. E. None of the answers is correct.
The following questions explore the relationships between total and marginal functions in the economic profit-maximizing (EPM) model:Required:A. The total revenue function rises over the range of operating activity portrayed in the text. Why does the marginal revenue function decrease?B. What is the behavior of the marginal cost curve?C. In the EPM model, where is the profit-maximizing volume level? Explain.
What will be an ideal response?