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I am confused in calculating the Revised Receivable …..the examiner not subtract discount from sales(i.e 15m-15m x 1%) for receivables who pay with in 30days….kindly explain me.
It is debatable whether or not to subtract the discount from the sales. The reason is that on one hand, the balance sheet figure would be the full amount of receivables (because they only get the discount if they pay quickly). On the other hand, the actual cash received will obviously be lower because of the discount.
Because of this the examiner accepts either answer. He used to subtract the discount, but more recently he does not subtract the discount.
But he has made it clear that he will give full marks whether or not you subtract it.
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