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Hello sir I tried to solve the question.the same way u explained in the lecture but the test answer is different .The way I solved it is :
480000-48000(.1*480000)=432000 less the cash discount (.05*432000)=410400 plusthe tax rate (.175*410400) and I got 482220 which is option C but the test answer is D which is 503820 could u explain what is wrong ?
Because we are not sure whether they are going to pay within 14 days we shouldn’t include the discount in the receivables so we add back the cash discount .got it now thank you 🙂
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