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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	$   	$
  Schedule of Expected Cash Collections
  Accounts receivable	$
  November sales	  	$
  December sales
  Total cash collections	$   	$
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	$   	$
  (Click to select)DeductAdd: (Click to select)Beginning merchandise inventoryDesired ending merchandising inventory
  Total needs
  (Click to select)DeductAdd: (Click to select)Beginning merchandise inventoryDesired ending merchandising inventory
  Required purchase	$   	$


Capp Corporation
Schedule of Expected Cash Collections
November	December
  Sales	350000	360000
  Schedule of Expected Cash Collections
  Accounts receivable	68250	136500
  November sales	210000
  December sales		216000
  Total cash collections	278250	352500
Capp Corporation
Merchandise Purchases Budget
November	December	January
  Budgeted cost of goods sold	262500	270000	255000
Add: Desired ending merchandising inventory	108000	102000
  Total needs	370500	372000
Deduct: Beginning merchandise inventory	105000	108000
  Required purchase	265500	264000
Workings

November	December	January
Accounts receivable
opening	70000	140000	144000
   +sales	350000	360000	340000
   - collections (opening*39/40+sales*60%)	278250	352500	344400
   - uncollectible	1750	3500	3600
   closing	140000	144000	136000
COGS (75% * sales)	262500	270000	255000
Accounts payable
opening	257000	265500
   +purchases (COGS+closing inventory-opening inventory)	265500	264000
   - payment	257000	265500
   closing	265500	264000
Inventory
    opening	105000	108000	102000
   closing (following month COGS*.4)	108000	102000