Question

Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow: Sales are budgeted at $320,000 for November, $330,000 for December, and $310,000 for January. Collections are expected to be 40% in the month of sale and 60% in the month following the sale. The cost of goods sold is 75% of sales. The company desires an ending merchandise inventory equal to 20% 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 $67,000. The November beginning balance in the accounts payable account is $254,000. Required: a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December.

Prepare a Schedule of Expected Cash Collections for November and December.

	November December Sales $320,000 $330,000 Schedule of Expected Cash Collections Accounts receivable $67,000 November sales December sales Total cash collections $67,000 $0

Prepare a Merchandise Purchases Budget for November and December.

	Merchandise Purchases Budget November December Cost of goods sold Add: Desired ending merchandise inventory Total needs 0 0 Less: Beginning merchandise inventory Required purchases $0 $0

I need help I don't understand how to do this question. I would really appreciate your help.