Solution-Make a Schedule of Expected Cash Collections for

Make a Schedule of Expected Cash Collections for November

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Reference no: EM132975209

Question - ABC Company is a wholesaler of garments. Data regarding the store's operations follow:

Sales are budgeted at $525,000 for November, $480,000 for December, and $450,000 for January.

Collections are expected to be 80% in the month of sale, 16% in the month following the sale, and 4% uncollectible.

The cost of goods sold is 75% of sales.

The company purchases 70% of its merchandise in the month prior to the month of sale and 30% in the month of sale. Payment for merchandise is made in the month following the purchase.

The November beginning balance in the accounts receivable account is $117,000.

The November beginning balance in the accounts payable account is $381,000.

Required -

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

b. Make a Merchandise Purchases Budget for November and December.

Reference no: EM132975209

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Make a Schedule of Expected Cash Collections for November

Reference no: EM132975209

Reference no: EM132975209

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