Mighty Fine Goods (MFG) is a wholesaler of industrial goods. Data regarding the store's operations follow:...

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Mighty Fine Goods (MFG) is a wholesaler of industrial goods. Data regarding the store's operations follow: Sales are budgeted at $300,000 for November, $310,000 for December, and $290,000 for January. Collections are expected to be 50% in the month of sale and 50% in the month following the sale. The cost of goods sold is 70% of sales. The company desires an ending merchandise inventory equal to 30% 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 $65,000. The November beginning balance in the accounts payable account is $252,000. Required: A) Prepare a Schedule of Expected Cash Collections for November and December. B) Prepare a Merchandise Purchases Budget for November and December. C) The manager of MFG says to you, "Man, making these budgets is a lot of work! I think we should stop doing them. I doubt anybody uses them anyways." What do you think? Do you recommend the manager stop doing their budgets? Explain. Mighty Fine Goods (MFG) is a wholesaler of industrial goods. Data regarding the store's operations follow: Sales are budgeted at $300,000 for November, $310,000 for December, and $290,000 for January. Collections are expected to be 50% in the month of sale and 50% in the month following the sale. The cost of goods sold is 70% of sales. The company desires an ending merchandise inventory equal to 30% 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 $65,000. The November beginning balance in the accounts payable account is $252,000. Required: A) Prepare a Schedule of Expected Cash Collections for November and December. B) Prepare a Merchandise Purchases Budget for November and December. C) The manager of MFG says to you, "Man, making these budgets is a lot of work! I think we should stop doing them. I doubt anybody uses them anyways." What do you think? Do you recommend the manager stop doing their budgets? Explain.

Answer rating: 100% (QA)

C No I would not recommend th... View the full answer