Question
The following information pertains to Mon Ami Ltd. Month Sales Purchases July $30,000 $10,000 August 34,000...
The following information pertains to Mon Ami Ltd.
| 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 pattern:
• Month of sale: 30%
• Month following sale: 50%
• Two months following sale: 15%
• Uncollectible: 5% 40% of purchases are paid for in cash in the month of purchase, and the balance is paid in the following month.
Required:
a) Prepare a cash collections schedule for the last three months of the year.
b) Prepare a cash disbursement schedule for the last three months of the year.
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