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Ah! Thanks! I have a tendency to skim over important details like that.
Haha yes, not many people here in the U.S. makes it very hard to find a study buddy, I was born and raised in Europe, which is why I know all about the ACCA. I’m part of the ACCA SoCal Chapter so will make sure to mention you guys in our next meeting,
Thanks again, I’ll probably have more questions going forward to stand by! 🙂
Bringing this post back as I noticed that the general question has already been asked and did not want to duplicate.
So is the reason that Inventory is not impaired because it’s considered a current asset? My mistake in the question is that I was pro rating the 100K of impairment remaining against P&E, buildings AND inventory, when it looks like I should have just used P&E and Buildings
Hey John,
Mine should be the edition that covers up till June 2017. I’m assuming that’s ok? Thanks for the clarification though, it was quite confusing.
Rachel
That makes sense! Thank you. Appreciate all your help during the last couple of months. I feel ready to take the exam this Thursday here in Los Angeles. Thanks again, John
John,
I still don’t understand the workings for question 19.3 Irrecoverable debts. Specifically, in my balance sheet I removed the irrecoverable debt from the Receivables of 900 and then underneath had the allowance for doubtful debts line item. In the answer, they just don’t remove the irrecoverable debt. Are you saying that is taken into consideration thru retained earnings since it is accounted for in the SOPL?
Thank you!John,
Since the question has already been asked, I didn’t want to start a new topic. (I’m referring to BPP revision kit Q10.2, first question asked on this thread).
I understand the logic behind the answer, but what I am getting hung up on is what I think is “double counting” for lack of a better phrase.
So we calculate the actual expense for the year till 31 Jan 20X3, which includes the month of Jan which we pay in April. So the expense is 100,000 with that payment, but we also account for the accrual of 10,000 because we hadn’t paid for the month of Jan by year end. Wouldn’t that be overstating the expenses by 10,000 since we already account for the Jan payment when we calculate the year’s worth of rent? In other words, why wouldn’t expenses be $90,000 + accrual of $10,000I hope my question makes sense. Maybe I’ve been doing problems for a little too long and overthinking, thus confusing myself, but could you explain it to me?
Your help is as always much appreciated.
Rachel
Yes, I agree, we had subtracted the amount owed from one company to another, we adjusted the inventory by the unrealized profit. In this case, isn’t there still $50,000 owing to Swing that needs to be adjusted for?
But isn’t standard costing what something should have cost to produce, and not the actual cost? Which is why we have variances? So to find the actual produced wouldn’t you chose what was actually purchased? I understand what you said that they could have used more or less than the standard, I guess my intuition was incorrect and wondered why. I always associate standard anything with budget not actual. I disregarded inventory because I assumed there was none, since they didn’t mention it. Is that a bad assumption moving forward?
Thank you!
Rachel
