Question 5 (13 marks) The following information pertains to Amigo Corporation: Month July August September October November December Sales 30,000 34,000 38,000 42,000 48,000 60,000 $10,000 12,000 14,000 16,000 18,000 20,000 Cash is collected from customers in the following manner: Month of sale Month following sale Two months following sale 15% 5% Amount uncollectible "Customers paying in the month of sale receive a 2% cash discount. 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month Requirement (a) Prepare a summary of cash collections during the 4th quarter (October to December). Solution