Hi Sir,
Re Example 7 of Chapter 19 from OT notes, when calculating Receivables using the Indirect Method, why Bad Debts is not taken into consideration? Since the calculation is just the difference between the b/d and c/d, however when I was doing it with T account, I was also crediting the bad debts thus leaving me with a balance of 117. Is it because it is not a cash transaction? I am still getting a bit confused on these :/
Thank you in advance.
Ask the Tutor ACCA FR
Chapter 19
Moreover, in chapter 21, Example 2 how is the 'as restated' of 12.4c calculated in the Answer please? and what does it mean 'restate the comparative figure?
The Receivables figure in the SoFP is always shown net of the provision for Doubtful Debts and any bad debts should already have been written off during the year (or at the year end)
Take the originally disclosed eps from last year and multiply that figure by the upside-down bonus fraction and rights fraction
The process of taking that previously disclosed eps, recalculating and disclosing the amended figure is know as "restating"
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