Well, the Wiley problem is asking for the average receivables and the Bisk problem is asking for the daily cash collected.  But to show how the Wiley formula as applied to Pheepa's Bisk problem: 

(.30 x 45 days) + (.70 x 10 days) x 50,000 = (13.5 + 7) x 50,000 = 1,025,000

You have to do two calculations to get the receivables collection period, so just apply the 45 day payments and the 10 day payments to their respective percentages.

Avg A/R 1,025,000

Avg Collection Period 20.5 days (13.5 + 7)

Avg A/R/Avg Daily Sales = 20.5; this is the formula to calculate the receivables collection period.  If you move this equation around you get back to the avg collection period x daily sales = avg ar.  

So the Wiley formula above would work for both problems, if the Bisk problem had asked for the average receivables or any of the other parts of the formula above.

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Now the Bisk problem:  They want to know the cash collections per day, which is an allocation of how 50,000 sold every day is collected.  As Nan did above (just copied from above)

50,000 x .7 x .02 = 700  This is the amount of collections forfeited due to taking the discount.

50,000 - 700 = 49,300  This is the net collections.

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I think the confusion lies in the fact that you use 50,000 dollars in both calculations.  To calculate average receivables, you multiply the 50,000 x average collection period.  To calculate average daily collections, you have to assume you always have the same amount of cash payments coming in each day as your daily sales, assuming everything remains constant.  (I made a very bad attempt at explaining why that is above in conjunction with Gleims explanation, so forget what I said and just assume LOL) Then you just say, ok, out of the 50,000 cash coming in each day, 70% is eligible for the 2% discount.  Next calculate the discount and subtract from the 50,000.

Well, hopefully this ties everything together different people have said.  Let's see...we've had Gleim, Wiley, Bisk ahhh

Goodnight all! 

OK, so far so good.  But it's been 2 1/2 months since I took BEC, and my brain is getting foggy in certain areas.

Please remind me:  If we are can validly forecast that 70% of the people are taking the 2% discount, why don't we factor the discount into the average receivables?

Why do we do this:

(.30 x 45 days) + (.70 x 10 days) x 50,000 = (13.5 + 7) x 50,000 = 1,025,000 Average A/R

Instead of this?

(.30 x 45 days) + (.70 x 10 days x 98%) x 50,000 = (13.5 + 6.86) x 50,000 = 1,018,000 Average A/R

Yeah, tell me about it.  Speaking of BEC, I'm so stressed over not having my score; I took both FAR and BEC in May then jumped into REG and am tentatively taking first of July, so they're all blurring together...

Well, (I think!) you have to assume the receivables are recorded at gross with credit adjustments to sales discounts and allowances when payments are received.

Speaking of REG, it's SO MUCH to remember!  I hope the examiners don't expect you to memorize all the exact dollars for the phase outs, AGI limits, exclusions, credit amounts, rates, omg....

If the REG numbers stay the same year-to-year you should try to remember the exact number.

But, according to the Becker "ask us a question" CPAs, if it's a question regarding numbers that are indexed and change every year, the examiners will make it obvious.  The question will be either way above or way below the limit.  The examiners like writing questions that don't have to be changed every six to 12 months.