The following information pertains to Amigo Corporation: Show the calculations M
ID: 2392359 • Letter: T
Question
The following information pertains to Amigo Corporation:Show the calculations
Month Sales Purchases
July $30,000 $10,000
August 34,000 12,000
September 38,000 14,000
October 42,000 16,000
November 48,000 18,000
December 60,000 20,000
? Cash is collected from customers in the following manner:
Month of sale (2% cash discount) 30%
Month following sale 50%
Two months following sale 15%
Amount uncollectible 5%
? 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
Required:
a. Prepare a summary of cash collections for the 4th quarter.
b. Prepare a summary of cash disbursements for the 4th quarter.
Explanation / Answer
a.summary of cash collections:
17,640
b.summary of cash disbursements
october november december total August sale collection (34,000*15%) 5,100 nil nil $5,100 september sale collection (38,000*50%) (38,000*15%) 19,000 5,700 nil 24,700 october sale (42,000*30%*98% (after cash discount) (42,000* 50%) (42,000*15%) 12,348 21,000 6,300 39,648 november sale (48,000*30%*98%) (48,000*50%) nil 14,112 24,000 38,112 december sale (60,000*30%*98%) nio nil 17,64017,640
Total 36,448 40,812 47,940 125,200Related Questions
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