AAT Cash Management Solution to Sample Assessent 1 Task 3 a(i&ii) Sales

A company has supplied information regarding its forecast sales, labour costs and purchases.
Sales volume has been forecast for periods 1 to 5.
Each product sells for £30.
The company estimates that 15% of sales are made on a cash basis with the balance made on a credit basis.
An analysis of historical data shows that credit customers settle their debts on the basis of 30% one month after the date of sale and 70% two months after the date of sale.

a-i) Complete the table below to identify the total sales receipts forecast for periods 4 and 5.


So, the answer is as follows:

a-ii) Identify the forecast trade receivable balance at the end of period 5.
Look again at the Credit sales table calculated above.
Lets copy this table again for ease in understanding:

Now, lets make a receipt schedule table but this time only with percentages as shown below:

The trade receivable balance at the end of period 5 is forecast to be £246585.

Hope you like the solution.
Please do correct me if I am wrong at any point.
Note that you can do a similar process for trade payables (purchases and payments) but you will need to reverse the T-Account entries. Hence yellow side for payments will be Dr side and Opening Balances from purchases will shift to Cr side instead.
For a completed example, see my discussion forum for AAT Sample assessment task 3 part c.
Thank you.
Best Regards,

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