Early Settlement Discounts

gracieogracieo Posts: 1Registered
I'm doing level 3 AAT and cannot get my head round this question. I understand part a and b, but its the settlement discounts in part 3 that have confused me.

I have attached the questions with the answers that my teacher has provided.

For example, Lysander Ltd has paid £2345.85 and have taken the 2.5% discount
So the gross amount without the discount is 1.025 x £2345.85 = £2404.50

After Discount
Gross - £2345.85
VAT - £390.97
Net - £1954.88

Before Discount
Gross - £2404.50
VAT - £400.75
Net - £2003.75

I make the figures to be entered into the discounts allowed daybook to be:
Gross - £58.65
VAT - £9.78
Net - £48.87

I must be doing something wrong but I can't see what. Would appreciate it if someone could explain how you get to the correct answers.

Thank you!!
Grace

Best Answer

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