EXAMPLE (375,000*.60=225,000) All calculations of the exercises should be docume

Question

EXAMPLE (375,000*.60=225,000) All calculations of the exercises should be documented and included with the response.

Caribbean Construction Corporation supplies materials and lease machinery for construction Data regarding the store's operations follow: - Sales are budgeted at $375,000 for November, $280,250 for December, and $298,65 . Collections are expected to be 60% in the month of sale, 30% in the month following . The cost of goods sold is 60% of sales. for January the sale, and 10% uncollectible The company desires an ending merchandise inventory equal to 55% of the cost? goods sold in the following month. Payment for merchandise is made in the month following the purchase. -Other monthly expenses to be paid in cash are $18,956. Monthly depreciation is $17,500. -Ignore taxes.

Explanation / Answer

The January month sales figure (last number) is not clear in the question. I assumed it is 298650/-

1. Expected Cash Collections

November

December

2.Merchandise Purchase Budget

Cost of Goods sold

98554.5 (179190x55%) ****

****298650*60%=179190

3. Cash Budget

4. Budgeted Income statements

5. Budgeted Balancesheet

Cash collections from previous month sale (Given) 74000 Cash collections from current month sales (375000x60%) 225000 TOTAL 299000

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