A. prepare a summary of cash collections for the 4th, Ask an Expert

Accounting

The following information pertains to Amigo Corporation:

Month Sales then 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.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M940912

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