Inventory

trial balance at 31 March 2017

Hi My dear tutor , I have a question.

The query has been taken from Becker page number between 76 and 77

The inventory of Highwood was not counted untill 4 April 2017 due to operational reasons.At this date its value at cost was $36 million and this figure has been used in the cost of sales calculation in trial balance.Between the year end of 31 march and 4 april 2017, highwood received a delivery of goods at a cost of $2.7 million and made sales of $7.8 million at a mark-up on cost of 30%. Neither the goods delivered not the sales made in this period were included in Highwood’s purchase (as a part of cost of sales) or revenue in the trial balance.

I am gonn use the formula in F3

is this correct?

Opening inventory-36000
purchase (2700) it has not been delivered
closing inventory 6000
equal to 39300

of sales 7800*100/130=6000

Second example, On 31 march 2017 Highwood factored (sold) trade receivables with a book value of $10 million to Easyfinance.Highwood received an immediate payment of $8.7million and will pay Easyfinance 2% per month on any uncollected balances.any of the factored receivables outstanding after 6 months will be refunded to easy finance.Highwood has derecognised the receivables and charged 1.3$ million to Administrative expense.

if highwood had not factored these receivables it would have made an impairment allowance of $600,000 against them.

Without recourse happens why 8700 still recegnised as liability

debit operating expense-1300
debit cash-8700
credit trade receivable-10000

if it would be with recourse I would recognise it in the following way-it treated in this way in the anwer why?

It deducted 1300 from administrative expense but should be added over finance cost or administrative expense

debit finance cost-1300
debit cash-8700
credit trade receivbale-10000

debit cash-8700
credit loan-8700

debit irrecoverable debt-600
credit trade receivable-600

Could you explain it please?I really stuck?