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Sir can you tell me that how to treat allowance for doubtful debts and bad debts in cash flow statement
Sir can you tell me that how to treat allowance for doubtful debts and bad debts in cash flow statement
Sir,
thanks for giving me answer in receivable section first!!!
I have another question
Since I never came across a question in which inventory was to be valued at NRV, therefore I am a little confused in this question as how the value of NRV is lower than cost and how to calculate it …..Inventory at 1 November 2014 ………….. 350
Inventory at 31 October 2015 was valued at $275,000 based on its original cost. However, $45,000 of
this inventory has been in the warehouse for over two years and the directors have agreed to sell it in
November 2015 for a cash price of $20,000.When it will be given in NOTES about irrecoverable debts, then I have to subtract it from receivables but if they are only in trial balance, then I don’t have to subtract.
Right?The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader.
TRIAL BALANCE AS AT 31 MAY 20X6
Dr Cr
$ $
Sales 138,078
Purchases 82,350
Carriage 5,144
Drawings 7,800
Rent and insurance 6,622
Postage and stationery 3,001
Advertising 1,330
Salaries and wages 26,420
Irrecoverable debts 877
Allowance for receivables 130
Receivables 12,120
Payables 6,471
Cash on hand 177
Cash at bank 1,002
Inventory as at 1 June 20X5 11,927
Equipment at cost 58,000
Accumulated depreciation 19,000
Capital 53,091
216,770 216,770
The following additional information as at 31 May 20X6 is available.
1 Rent is accrued by $210.
2 Insurance has been prepaid by $880.
3 $2,211 of carriage represents carriage inwards on purchases.
4 Equipment is to be depreciated at 15% per annum using the straight-line method.
5 The allowance for receivables is to be increased by $40.
6 Inventory at the close of business has been valued at $13,551.
Required
(a) Prepare a statement of profit or loss for the year ended 31 May 20X6. (8 marks)
(b) Prepare a statement of financial position as at that date. (7 marks)
(15 marks)Sir, also tell me that whether receivables should be 12120 – 877- 170 = 11073
or they should be
Receivables 12,120
Less allowance for receivables 170
Net receivables 11,950I answered 11073 and the book answered 11950
Am I following the wrong book or my concepts are really very weak.Sir, see this question
TRIAL BALANCE AS AT 31 MAY 2016
Purchases…………………………………………………….. 5144
Drawings ……………………………………………………… 7800
Inventory as at 1 June 2015……………………………. 11927Additional information:
Inventory at the close of business has been valued at $13,551.Sir,
According to me and as I perceived you said that COS in I/S should be
Opening inventory + carriage+ Purchases – Drawings – closing inventory
11927+ 2211 + 5144 – 7800 – 13551 = -2069
But at the end of the book such solution is given, and actually, we were supposed to make financial statements.
Opening inventory 11,927
Purchases (W1) 84,561
Less closing inventory 13,551
Cost of goods sold 82,937W1
Purchases
Per trial balance 82,350
Add carriage inwards 2,211
Per statement of profit or loss 84,561PLZ do suggest me some good advice bcz I am about to give exams