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  1. avatar says

    Consolidated accounts & statments of cash flow has been a problem to understand. my exam is in april..computer based. am studing on my own & am having a problem with watching lectures..please help. thanks

  2. avatar says

    Plz help !! 44. Apple owns her own business selling dolls to stores. At 30 June 2008 she had the following balances in her books:
    Trade receivables: 62,900
    Allowance for receivables: (900)
    A balance of $2,000 due from X Co is considered irrecoverable and is to be written off. Y Co was in financial difficulty and Apple wished to provide an allowance for 60% of their balance of $1,600. She also decided to make a general allowance for receivables of 10% of her remaining trade receivables.
    What was the allowance for receivables in her Statement of Financial Position at 30 June 2008?
    $6,890 is the answer but i get 7764:(

      • Profile photo of John Moffat says

        I will answer you, but please ask this sort of question in the F3 Ask the Tutor Forum otherwise I may well not see it :-)

        After writing off the irrecoverable debt, receivables are 62900 – 2000 = 60900.
        There is a specific allowance of 60% x 1600 = 960.
        The is a general allowance of 10% of all the remaining receivables, so 10% x (60900 – 1600) = 5930.
        So total allowance = 960 + 5930 = 6890.

  3. Profile photo of Mahoysam says

    I need help with the below question:

    At 30 November 2008, Taylor’s general ledger included the following balances:
    Trade receivables $198,635
    Allowance for receivables at 1 December 2007 $3,643
    Taylor’s allowance for receivable should be revised to $1,345
    How should receivables be reported on Taylor’s Statement of Financial Position?

    A Current asset of $197,290, Current liability $1,345
    B Current asset of $199,980
    C Current asset of $198,635 Current liability $1,345
    D Current asset of $197,290

    I don’t get how come the answer is D, I can’t even find the correct answer amongst the choices, I thought it is the movement of the allowance is what we deduct or add to the receivables NOT the revised allowance!!! In this question, I believe 2,298 should be added to the receivables, please help.

      • Profile photo of John Moffat says

        Congratulations on passing :-)

        Sorry for not replying to your question – I did not spot it.

        However for others reading this, the answer is as follows:

        As at 30.11.2008 the receivables balance is 198,635, and as at the same date the allowances for receivables has been revised and stands at 1,345.

        So the current asset is 198,635 – 1,345 = 197,290.

      • Profile photo of Mahoysam says

        Thank You! I must say Opentuition is such a great website. I am studying online and paying for my course, but I still come here for more support because the level of teaching is really good!

        Is it you who gives the lecture? If that’s you then you are really a fantastic lecturer. You helped me so much with my F2, now I have passed the first 3 papers on first attempt, thanks!

    • Profile photo of Shunmas says

      @hanadi3

      There is an increase of $12,560 and charged (expensed / debited) to income statement. Any decrease (or reversal) would be credited (as income) on the income statement.

      Allowance (or Provision) by its very nature has a normal balance on credit side (like a liability). When it increases, we will credit it and when decreases, it will be debited.

      HTH

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