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Forums › ACCA Forums › ACCA MA Management Accounting Forums › Ma2 Cash flow sir kindly guide me this question how to slove it
Question 1
Erasmus Ltd made cash sales of $10,000, $8,000 and $12,000 in its first three months of business. 35%
of its sales are for cash. The remaining sales are on credit and amounts are received as follows:
Received in month of sale: 15% of total sales (after a 5% settlement discount).
Received in the 2nd month: 30% of total sales
Received in the 3rd month: 20% of total sales.
What will Erasmus receive in its third month of business?
A $12,000
B $10,100
C $10,400
D $10,310
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Please check that you have copied the question correctly, because as you have written it none of the choices of answers are possible.
You have written that the cash sales were 12,000 in the third month, and therefore the total cash received in the third month must be more than 12,000 (because they are receiving money from credit sales as well!!).