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Receivable

This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.

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May 4, 2016 at 7:03 am #313608
abrizni10
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Dear sir pls help me
At 31 March the balance sheet of a company included the following.
trade Receivable 23 000 Allowance for receivables 1 200
During April credit sales were $64 000 and cash sales were $256 000. Credit customers paid $56 840 net of a 2% cash discount.
What will be the trade receivable at 30 April?
My answer was 30160 but in the book it says 29000?
May 4, 2016 at 7:41 am #313633
John Moffat
Keymaster
- Topics: 57
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Receivables will be 23,000 + 64,000 – (56,840 x 100/98) = 29,000.
(Since the discount is 2%, for every 100 owed they will only have paid 98. Therefore the receivables they were paying for will be 100/98 x 56,840.)
May 4, 2016 at 8:09 am #313637
abrizni10
Member
- Topics: 55
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But sir isn’t it mentioning Discount Allowed?
May 4, 2016 at 11:19 am #313656
John Moffat
Keymaster
- Topics: 57
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Of the 58,000, 56840 is debited to cash and 1,160 is debited to discount allowed.
But that is irrelevant for this question – we credit receivables with (in total) 58,000.
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