Question 5 Part A The following information pertains to Amigo Corporation: Month July August September October November December Sales $30,000 34,000 38,000 42,000 48,000 60,000 Purchases $10,000 12,000 14,000 16,000 18,000 20,000 Cash is collected from customers in the following manner: Month of sale (2% cash discount)30% Month following sale Two months following sale Amount uncollectible 50% 15% 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.
Question 5 Part A The following information pertains to Amigo Corporation: Month July August September October November December Sales $30,000 34,000 38,000 42,000 48,000 60,000 Purchases $10,000 12,000 14,000 16,000 18,000 20,000 Cash is collected from customers in the following manner: Month of sale (2% cash discount)30% Month following sale Two months following sale Amount uncollectible 50% 15% 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 5
Part A
The following information pertains to Amigo Corporation:
Month
July
August
September
October
November
December
Sales
$30,000
34,000
38,000
42,000
48,000
60,000
Purchases
$10,000
12,000
14,000
16,000
18,000
20,000
Cash is collected from customers in the following manner:
Month of sale (2% cash discount)30%
Month following sale
Two months following sale
Amount uncollectible
50%
15%
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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