Homework SourseThe following information pertains to Amigo CorporationShow
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.
Solution
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 | 17,640 | 17,640 |
| Total | 36,448 | 40,812 | 47,940 | 125,200 |
