Spring Co sells electronic products and has some cash sales and some credit sales. Actual sales for the past four months have been as follows. $February 80,000March 60,000April 40,000May 60,00010% of the sales are cash sales, and the others are credit sales. Among the credit sales, 20% will be paid in the month of sales and eligible for a cash discount of 5%, 70% will be paid in the month after sales, and the remaining will be paid in the second month after the sales. In each month, the company purchases the amount that satisfies next month’s sales. All the purchase is credit purchase, and the credit period offered by the supplier is 40 days.Required(i) Calculate the cash receipts in the month of May. (5 marks)(ii) Calculate the cash payment in April for the goods purchased. (5 marks)
Spring Co sells electronic products and has some cash sales and some credit sales. Actual sales for the past four months have been as follows. $February 80,000March 60,000April 40,000May 60,00010% of the sales are cash sales, and the others are credit sales. Among the credit sales, 20% will be paid in the month of sales and eligible for a cash discount of 5%, 70% will be paid in the month after sales, and the remaining will be paid in the second month after the sales. In each month, the company purchases the amount that satisfies next month’s sales. All the purchase is credit purchase, and the credit period offered by the supplier is 40 days.Required(i) Calculate the cash receipts in the month of May. (5 marks)(ii) Calculate the cash payment in April for the goods purchased. (5 marks)
