Expected Cash Receipts - AAT level 4 BPP question bank

From BPP answer bank - first assessment pg 104 = Credit Management

Question 6d - Jontys customers currently pay 30 days after the month end. He is introducing a 1% discount from month 2 if customers settle the invoice in the same month. It is expected that 80% of customers will take advantage of this. The expected sales revenue per month is as follows:
month 1 - £95000
month 2 - £105000
month 3 - £136000

What will be the expected cash receipts in month 3 be?

I got the answer to be £107712, taking 80% of month 3 and deducting 1%, but the answer is actually £128712 from the answers on pg 119, but I cannot see how they got that figure. Can anyone help please?

Comments

  • PeterC
    PeterC Registered, Tutor Posts: 243 Dedicated contributor ? ? ?
    As well as the £107,712, there is the 20% of month 2 customers who didn't settle in month 2. 20% x £136,000=£21,000.
    107712+21000=128712
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