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The following information was obtained from Kelly Corporation:
Month Sales Purchases
April $32,000 $12,000
May 36,000 14,000
June 40,000 16,000
July 44,000 18,000
August 48,000 20,000
September 57,000 22,000
Cash is collected from customers as follows:
Month of sale (3% cash discount) 25%
Month following sale 45%
Two months following sale 25%
Amount uncollectible 5%
35% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
Required:
Problem a. Prepare a summary of cash collections for the 3th quarter.
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