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I found this question in BPP exam kit.Could you please solve the following question for me?And explain it. The following details have been extracted from the receivables collection records of C Co. Invoices paid in the month after sale 60% , Invoices paid in the second month after sale 25%, invoices paid in the third month after sale 12% , Bad debts 3% . Invoices are issued on the last day of each month.customer paying in the month after sale are entitled to deduct to a 2% settlement discount.Credit sales values for June top September are budgeted as follows: June($3500),July($40000),August($60000),September($45000) What is the amount budgeted to be received from credit sales in September?
The cash received in September will be 60% of August sales (because they are paid after 1 month), plus 25% of July’s sales (because that is paid after 2 months), plus 12% of June’s sales (because that is paid after 3 months).
Hello Mr. John
How is here Bad debt does not represent any deduction is that because 60%+25%+12% makes a total of 97%, therefore 3% 9s already not included in question please.
Thank you.The bad debts are certainly not included. The question asks for the cash received, and if it is a bad debt then there is no cash received 🙂
Pls Sir
Why didn’t you consider 2% settlement discount?
I thought it was Receipt from August sale – 60000×60%x98%
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