# CMA Study Group

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• #### 1.  Part 2 MCQs query.

Posted 22 days ago
Hello folks,
Greetings!

Can anyone help me out with this question and its concept.
Jackson Distributors sells to retail stores on credit terms of 2/10, net 30. Daily sales average 150 units at a price of \$300 each. Assuming that all sales are on credit and 60% of customers take the discount and pay on day 10 while the rest of the customers pay on day 30, the amount of Jackson\'s accounts receivable is
A.
\$1,350,000
B.
\$990,000
C.
\$900,000
D.
\$810,000

Option 'D' is the right option.
Regards,
Pragati Verma

• #### 2.  RE: Part 2 MCQs query.

Posted 21 days ago
Hi Pragati

See below solution:

60% sale for 10 days = 150*300*10 = \$450,000 60%    =  \$270,000
40% sale for 30 Days =   150*300*30= \$ 1,350,000 40%=  \$540000

Total  Receivables                                                                 \$810,000

I hope this can be a help to you.

Regards

• #### 3.  RE: Part 2 MCQs query.

Posted 21 days ago

Dear Pragati,

There are different ways to calculate this question, but I will explain you easiest way

Daily sales 150 units @ price \$300 = \$45,000 per day 60% of customers pay due amount within 10 days of discount period \$45,000 per day * 10 = \$450,000* 60% = \$270,000 while the rest of other customers are taking 30 days to pay due amount 45,000 per day * 30 days = 13,50,000*40% = \$540,000

Total accounts receivable is here 270,000+540,000 = \$810,000  (D)

(OR)

You can also solve this question with number of outstanding days or sales days multiplied by daily sales amount.

In first scenario 60% customers will pay within 10 days 0.60*10 = 6

While the remaining 40% customers will pay within 30 days 0.40*30=12

Total number of days taken by customers is 6+12 = 18

Daily sales units 150*@ price 300 = \$45,000 per day sales amount

To get accounts receivable 18*45,000 = \$810,000 option  (D)

Thanks & Regards

Sumair Shaik

Accountant

United Arab emirates

Sent from Mail for Windows

• #### 4.  RE: Part 2 MCQs query.

Posted 18 days ago
Hi

The amount of AR includes:
+ 40% sales of first 20 days : 40% * 150units * \$300 * 20 days
+ 100% sales of last 10 days: 100% *  150units * \$300 * 10 days
Total = \$ 810000

Hope it can be useful.

Regards,
Duong Tran Thuy