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Variance variances variances everybody I’ve spoken to has said the same thing that they weighed heavy on their CBE (including my own)!!!
Hi Guys,
In simple terms Sales tax is caculated after all discounts including settlement. This is to be prudent and not overstate/understate the asset(receivable). Therefore sales tax will be calculated on the Cost Price less 10% les 5% settlement discount which is equal to 171000. 17.5% tax on this is = 29925. So in total to the receivables we post:
Cost: 171000
Sales Tax: 29925
Settlement Discount: 9000 (As we don’t know if they will receive this yet)
In total this equals 209925Yeah I hope so or else Im lost in the trading account also ha I’m panicking with the exams looming Im hoping I’ve done enough!
Sorry Im stilled confused!
If you’re asked for the stock @ 31dec 2005 is this not the opening stock @ Jan 2006? Which would be answer B????
I know you’ve given the answer above but the question doesnt ask for opening stock it asked for stock at year ended 2005?
You would:
Dr Receivables (To increase the asset)
Cr Allowance for Receivables (to decrease the expense)
Using the amount received.You would then:
Dr Bank/Cash
Cr Receivable
(This is to record the cash transaction)I would have thought it was a simple answer.
2400 compete units plus 80% of the closing inventory complete.So 2400 + 180 = 2380 complete units?
