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Hi Sir,
I am having difficulties with treatment of the information given, in comparison with the solution from BPP kit.
My understanding is the term “owed by” means what we have to pay, and “owed to” means what we will receive.
However, if I use the same understanding in the question I end up with net payment of 14.47 M to be to the Singapore subsidiary, and net receipts of 4.06,9.62, 0.39 and 0.40. But this is the opposite to the solution in the BPP Kit, it shows the payments as receipts and receipts as payment. Am I having the wrong understanding?
Please help.
“Owed by” refers to who is owing the money; “owed to” refers to the person who should receive the money.
So…..if I owe you $100, then I am owing to you $100 (and that is what I have to pay you).
You are owed $100 by me (and so that is the amount you expect to receive from me).
Thank you..but if use the same meaning. what I end up having as net payments and receipt, are vice versa to the Kit solution..there is where I can understand.
Multidrop Singapore owes 7.75M to Europe; owes 3.65M to US; and owes 5.01M to Malaysia.
So in total they are owing 16.41M
They are owed 1.94M from Newring UK.
So the net amount they are owing = 16.41 – 1.94 = 14.47M
(Which is the same as BPP’s answer – Multidrop Europe received 14.47M from Singapore (because that is the amount that Singapore are owing))
Dear John,
the question requires to calculate intra group and inter company curency transfers by multidrop Europe. As per solution there are total payments of 9.62+4.06+0.39+0.40 = 14.47 and the only reciept (Singapore) of 14.47. So Net result should be 0.
The solution states net result in gain of 9.62m. How this gain comes, Please explain ? and why the examiner didnt take 9.62 payment while calculating net gain.
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