Expected Cash Receipts  AAT level 4 BPP question bank
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Registered Posts: 3
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?
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?
0
Comments

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=1287120
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