It is because the question says that the debt had been written off during the year. So the balance at the end of the year is already after having removed the debt..
Hi. Regarding Question nr 4, the point nr (4). In the answer explanation it is written “(4) It is correct from cash received from doubtful debts to be credited to receivables.”, but in the calculation provided under the explanation, the cash received is not included. The calculation provided is “correct figure for receivables = 50000-2500+1800= 49300”, but the 2900 cash received from John (a doubtful debt) is not subtracted from the receivables.
francinesfj says
Hi John,
Good day. For Q3, I would like to understand why don’t I remove the irrecoverable debt from receivables (173,760 – 2,040)?
John Moffat says
It is because the question says that the debt had been written off during the year. So the balance at the end of the year is already after having removed the debt..
francinesfj says
Ah I see, perfect. Thank you.
Giri says
hi,regarding 1st question 88800-38000 should be 50800 and not 52800
John Moffat says
Thank you.
However the final answer is correct.
The decrease in the allowance should read as being 36,000 (not 38,000).
So the total expense is 88,800 – 36,000 = 52,800.
Kristiina says
Hi. Regarding Question nr 4, the point nr (4). In the answer explanation it is written “(4) It is correct from cash received from doubtful debts to be credited to receivables.”, but in the calculation provided under the explanation, the cash received is not included. The calculation provided is “correct figure for receivables = 50000-2500+1800= 49300”, but the 2900 cash received from John (a doubtful debt) is not subtracted from the receivables.
Joe... says
sir can you please explain to me no.4
John Moffat says
Did you click on ‘review quiz’ after submitting your answers, because at the bottom then shows the workings for each answer .