Capp Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:
•
Sales are budgeted at $350,000 for November, $360,000 for December, and $340,000 for January.
•
Collections are expected to be 60% in the month of sale, 39% 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 40% 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 $70,000.
•	The November beginning balance in the accounts payable account is $257,000.

Required:
a.
Prepare a Schedule of Expected Cash Collections for November and December. (Omit the "$" sign in your response.)

Capp Corporation
Schedule of Expected Cash Collections
 	November	December
  Sales	$
350,000
  	$
360,000

  Schedule of Expected Cash Collections
  Accounts receivable	$
70,000

  November sales
210,000
  	$
136,500

  December sales
216,000


  Total cash collections	$
280,000
  	$
352,500



b.
Prepare a Merchandise Purchases Budget for November and December. (Input all amounts as positive values. Omit the "$" sign in your response.)

Capp Corporation
Merchandise Purchases Budget
 	November	December
  Budgeted cost of goods sold	$
262,500
  	$
270,000

  Add: Desired ending merchandising inventory
108,000

102,000


  Total needs
370,500

372,000

  Deduct: Beginning merchandise inventory
105,000

108,000


  Required purchase	$
265,500
  	$
264,000