Cash Management AAT Assessment 1 Q:5

I really need help as I've spent too long on this question.
The settlement discount will reduce total profit by £153,340 which is equivalent to 5.5% of total sales.
How is the figure £153,340 worked out??

Please help

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Answers

  • toluwanimianita
    toluwanimianita Registered Posts: 2
    Thank you
  • Martih123
    Martih123 Registered Posts: 3
    I am having trouble working out how these figures are calculated. Anybody help? Thanks in advance
  • Smiller94
    Smiller94 Registered Posts: 12
    Martih123 said:

    I am having trouble working out how these figures are calculated. Anybody help? Thanks in advance

    Hi Martih,

    If you are wondering how N4T calculated the figures for the 6 periods, this is done as follows:
    P1: (492,000 x 0.55) x 10% = 27,060
    P2: (516,000 x 0.55) x 10% = 28,380

    this is continued for all six periods...
    Once you add all six periods of settlement discount, this gives you your 153,340 to answer task 5b)
    You then present this as a % of the total sales.

    Really hope this helps, it took me a while also.
    Martih123
  • Martih123
    Martih123 Registered Posts: 3
    Thank you Smiller94 :)
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