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This topic has 7 replies, 2 voices, and was last updated 11 years ago by MikeLittle.

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June 4, 2014 at 10:03 pm #173998
QIN
Member
- Topics: 63
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Hi Mike,

If seller agreed above treatment. Rev. is 2m in two years, discount rate is 4%. How to show the transaction in current year?

Dr. AR 2m/(1.04×1.04)
Cr. Revenue 2m/(1.04×1.04)

How to deal with the interest?

Thanks,
Qin
June 5, 2014 at 6:57 am #174080
MikeLittle
Keymaster
- Topics: 27
- Replies: 23369
Yes

Interest? Dr receivable Cr finance income
June 5, 2014 at 1:58 pm #174185
QIN
Member
- Topics: 63
- Replies: 176
Could you please check below amount? I am not strong for any finance cost/income 🙁

Dr AR 2Mx4%
CR Finance income 2Mx4%

Thanks,

Qin
June 5, 2014 at 3:42 pm #174258
MikeLittle
Keymaster
- Topics: 27
- Replies: 23369
No!

((2m / 1.04^2) * 4%) is unrolling the discount for the first year.

Qin, why are you asking these questions? This is a basic F5 / F7 / F9 topic

And if you’re not strong on finance income / costs, what are you doing entering the P2 room next Tuesday?
June 5, 2014 at 4:16 pm #174300
QIN
Member
- Topics: 63
- Replies: 176
Just want to have a try, my time left is not too much for passing all.
June 5, 2014 at 7:07 pm #174387
MikeLittle
Keymaster
- Topics: 27
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But basic discounting is something from early F level days!
June 5, 2014 at 8:48 pm #174423
QIN
Member
- Topics: 63
- Replies: 176
u r quite right, I have passed F with many many difficulties. I am so lucky to learn from your answers. Qin
June 6, 2014 at 6:59 am #174522
MikeLittle
Keymaster
- Topics: 27
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🙂
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