The following information pertains to Z Corporation:MonthJulyAugustSeptemberOctoberNovemberDecemberSales$30,00034,00038,00042,00048,00060,000Purchases$10,00012,00014,00016,00018,00020,000Cash is collected from customers in the following manner:Month of sale (2% cash discount)30%50%Month following saleTwo months following the saleAmount uncollectible5%40% of purchases are paid for in cash in the month of purchase, and the balance ispaid the following month.15%Required:a. Prepare a summary of cash collections for the 4th quarter.b. Prepare a summary of cash disbursements for the 4th quarter.

Lets start with basics.Budget: A budget is an estimation to determine the income that will be earned…

The following information pertains to Z 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

The following information pertains to Z 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The following information pertains to Z 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%
50%
Month following sale
Two months following the sale
Amount uncollectible
5%
40% of purchases are paid for in cash in the month of purchase, and the balance is
paid the following month.
15%
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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