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so im currently doing a SOCF exercise. the cash and cash equivalent opening = 67, ending = 68
So ideally, the correct “Net increase in cash and cash eq” is 1
But the answer i come up with is 9 which is over by 8, coincidently there is a bad debt amount of $8 which i added back under the operating activities. By not including the bad debt, my “Net increase in cash and cash eq” will become 1, which is the correct answer.
ok so now, is this the right approach by not including the bad debt AT ALL? Like im just completely ignoring it. Or there is a correct approach for this?
Irrecoverable debts are not relevant.
It does seem that you are not bothering to watch my free lectures because I work through an example which has irrecoverable debts using both the direct and indirect methods and explain why the irrecoverable debts are not relevant!!!
i did watch it through 2 days ago but i completely forgot about it…im truly sorry about it…
I should have check the lecture again before posting, again im so sorry…
- The topic ‘SOCF indirect method treatment to “bad debt”?’ is closed to new replies.