Registered Posts: 7 New contributor ?
I have a question from the AAT sample assessment 1(3c)which I can't understand how to calculate..Please help:)
the company pays suppliers on the basis :25% 1 month after purchase/40% after 2 months/35% after 3 months.
At the end of period 3 the balance of trade payables is forecast to be:
balance from period 1 £30135
balance from period 2 £66900
balance from period 3 £92400
Trade payables at the end of period 3 £189435

Complete the value of payables that will be paid in period 4 and 5
The answer is £88915 in period 4 and ££68180 in period 5
I don't know where to start to get this..

• AAT Student Posts: 191
Balances at the end of Period 3:

Bal from P1 means 25% was pd P2 and 40% pd in P3. £30135 is last 35% to be pd in P4

Bal from P2 means 25% was pd in P3. £66900 is 75% of P2 purchases. 40% of P2 purchases will be pd in P4 and 35% will be pd in P5 P2 purchases is £66900 *(100/75) = £89200

Bal from P3 means 25% of £92400 will be pd in P4 and 40% pd in P5

Paid in P4
(P1) £30135
(P2) £89200 x 40% = £35680
(P3) £92400 x 25% = 23100
TOTAL = £88915

Paid in P5
(P2) £89200 x 35% = £31220
(P3) £92400 x 40% = £36960
TOTAL = £68180

It's easier to understand if this information is in table form but this is the best I can explain it on here.
• Registered Posts: 7 New contributor ?
You are a star N4T, thank you for your help!