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December 2012,3 Question 3,Section C

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › December 2012,3 Question 3,Section C

  • This topic has 4 replies, 2 voices, and was last updated 8 years ago by Cebo.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • April 8, 2017 at 12:04 pm #380621
    Cebo
    Member
    • Topics: 2
    • Replies: 3
    • ☆

    Good-day,

    I have trade receivables at 260 Revenue 1600 and obviously 365

    260/1600*365= 59.31 days payment, Below comes my question if the current system customers are taking 59, to pay their debt, If we improve system and reduce receivables payment days to 30 days, I would like help in calculating the days cash tight up?Or other words how find out the tight up cash since agreed with customer is 30 days,But customers are taking 59 days to make payment?

    April 8, 2017 at 7:50 pm #380650
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10595
    • ☆☆☆☆☆

    What you agree with your customers does not really matter: what’s important is how long they actually take to pay.

    If they comply with your wish to reduce payment to 30 days then the amount of receivables should be:

    30 x 1,600/365 = 131 ie about half what it was when they took 59 days.

    April 10, 2017 at 3:21 am #380737
    Cebo
    Member
    • Topics: 2
    • Replies: 3
    • ☆

    Thank you for your response,But i am still not matching my answer with yours.

    Trade Receivables as per question 260,000,00 Dollars
    Revenue 1,600,000,00
    Days 365

    260/1600*365=59.31 days i am fine on this
    My question if i reduce my limit of tied up cash to 30 days what would be workings or answers in tied funds?

    The answers as per question says reducing agreed 30 days would be realise about $128500 or 40days would realise $84500 how did they perform workings do get this numbers? Thanks in advance

    April 10, 2017 at 3:31 am #380738
    Cebo
    Member
    • Topics: 2
    • Replies: 3
    • ☆

    I guess i got it whereby on the tied up cash as follows;

    59.31 Days – 30 to comply to pay = 29,31days*1600/365 = $128,482

    Thank you very much on opening my mind.

    April 10, 2017 at 3:32 am #380739
    Cebo
    Member
    • Topics: 2
    • Replies: 3
    • ☆

    I guess i got it whereby on the tied up cash as follows;

    59.31 Days – 30 to comply to pay = 29,31days*1600/365 = $128,482

    Thank you very much for opening my mind.

  • Author
    Posts
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