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:
i. Prepare a summary of cash collections for the period Oct - Dec.
ii. Prepare a summary of cash disbursements for the period Oct - Dec.