URGENT *** Assessment 2 task 4

Hi All,

I have an exam in the morning and I'm really stuck on the practise assessment 2 Q4.
Please could you help me work this out?


Comments

  • scamp83scamp83 Registered Posts: 87
    @paige08x Sorry I didn't see this earlier in time for your exam but hopefully it might help someone else at some point....
    To take advantage of the 3.5% settlement discount they are spreading the purchases out over 4 months (so 480+560+520+540 / 4 = £525,000 per month).
    In the first month (Apr) they are paying 60% of the April £525k less the 3.5% discount (so £315,000 - 3.5% = £303,975).
    In the second month (May) they are paying the same amount again (the 60% May purchases) plus 5% of the April account (so £303,975 + £26,250 = £330,225)
    In the third month (June) they are paying both of the above plus the remainder of the April account (£525,000 x 35% = £18,3750). So £303,975 + £26,250 + £18,3750 = £513,975
    In the fourth month (July) they are paying 60% of the July purchases less the 3.5% discount (£303,975) plus 5% of the June purchases (£525,000 x 5%) and 35% of the June purchases (£525,000 x 35%) so £303,975 + £26,250 + £183,750 = £513,975.
    It's a little difficult to describe without drawing a table up but I hope that helps in some way!
    PS I hope your exam went well, I had mine last week.... it was pretty brutal!
    chloewain_
  • Kinglee89Kinglee89 New Member Registered Posts: 15
    @scamp83 thank you for clearing this up for me. I have just finished the mock and I couldn't work out where I went wrong. I was working it out on a month by month basis!
    scamp83
  • petitechocoholicpetitechocoholic Registered Posts: 8
    Where does the £26250 come from?
  • scamp83scamp83 Registered Posts: 87
    5% of the £525,000
Sign In or Register to comment.