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Hello Mike,
Could You please help with one issue in this task AsHanti.
I do not understand accounting in point 5 in the question:
Ashanti sold 5 million $ of goods to its customer who recently made announcement that it is reconstructuring its debts wuth its suppliers including Ashanti. It is probable that Ashanti will not recover the amounts outstanding. The goods were sold after announcement was made although the order was placed prior to the ammendment. Ashanti wishes to make additional provision of 8 mio $ against total receivable at the year end, of which 5 mio $ relates to this sale.
I understand that when sale is made the following entey is made: Dr AR CrRevenue and so the reversal entry is made: Dr Revenue Cr AR – to eliminate the sale – but why can’t I make a provision?
And also in SOCI there is one line called: “Impaired receivable” = 3 mio $ – is it diff between 8 and 5? but whyy?
Thank You inadvanceF5 was not the easiest, as one said. I written in this session F9, and it was very easy for me, what I can’t say about F5. Flexed budget is not properly presented in the text book, so if the person does not attend the lectures it’s very difficult to guess how to solve it. I’ve prepared for the exam F5 very properly but still not sure that I’ve passed.
And I see that the feetback statistics on F5 was the worst (hard – 39%, Disaster – 28%) in comparison with for example P1,F9. Guys I wish you all Good Luck to pass and hope that the examiner will have a goodwill to put all of us PASS mark!!!-)))