Regarding the store's operations follow:
uncollectible.
o The cost of goods sold is 65% of sales. o The company desires ending merchandise inventory to equal 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $21,000
o Monthly depreciation is $16,000.
o Ignore taxes.
Required qtu:ed o17
a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December. c. Prepare Cash Budgets for November and December. d. Prepare Budgeted Income Statements for November and December e. Prepare a Budgeted Balance Sheet for the end of December.
Statement of Financial Position October 31
Asset Cash. Accounts receivable (net of allowance for uncollectible accounts Merchandise inventory. Property, plant and equipment (net of $658,000 accumulated depreciation Total assets
$22,000 $2,000 166,400 1,170,000 $1,440,400
Liabilities and Stockholders' Equity Accounts payable... Common stock .. Retained earnings Total liabilities and stockholders' equity
$199,000 $40,000 401,400 $1,440,400
