[khulan2002]

For the above question:
a) Adjustment to profit statement

Profit per draft financial statement : 684,000
(1) Inventory movement :
Adjustment for sales –> 36,000
(2) Duplicated sale
Elimination of profit–>. (6,000)
(3) Reduction in inventory: (5,000)
(4) Debts written off: (8,000)
(5) Increase in allowance for receivables: 12,000

Revised profit: 713,000

is it correct? I’m not sure if I understood the problem.

[khulan2002]

Building at cost – 1,940,000
Accumulated depreciation – 468,000
Carrying amount – 1,472,000

Depreciation expense – 97,000
Revalued amount – 2,649,000

DR Building (2,649,000-97,000) 2,552,000
CR Revaluation surplus? 2,552,000

how will this entry will be written in SOFP?

[khulan2002]

About Question d :
(d) A credit controller advised you to create specific allowance by 10% for Mrs. Jane owed
$15,000 to Mr. Brown Hash. Then, the general allowance for receivable is to be adjusted so that 1% of the remaining trade receivables.

Will it be written like this:

General allowance ((49,000-15,000)*1%) – 340
Specific allowance (15,000*10%) – 1,500
Total allowance for receivables – 1,840
Income and expense-receivables expense – 1,840

SOPL – Receivables expense – (1,840)
SOFP – Allowance for receivables – 1,090

[khulan2002]

Then It will be adjusted in SOPL:

DR Closing Inventory. $1800
CR Cost of sales. $1800

and for SOFP:
DR inventory $800
CR SOPL. $800 ?????

[khulan2002]

So the price included will be $1000 and not $800, right? Why will $800 not be included?

[khulan2002]

I am more stuck at question (f). Should I include 800$ or not. When I include $1,000 sold goods, the Financial Position statement is balanced with $345890 without $800 included.
The question was:
(f) Mr.Brown has sold goods by $1,000 on sale and return basis on credit term. These goods have cost of $800. The customer has not sold these goods to third parties yet.

How will this journal be written?

[Author]

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