Page 442 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx
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Fundamentals of financial accounting
13.2 B
Receivables
$ $
Balance b/f 26,300 Cash 231,000
Sales 250,000 Irrecoverable debts 24,200
Balance c/f 31,100
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276,300 276,300
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b/f c/f
Gross receivables £26,300 $31,100
Allowance £2,300 $4,200
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Net receivables £24,000 $26,900
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CHAPTER 14 – ACCOUNTING FOR INVENTORY
14.1 $1,000
The inventory should be valued at the lower of cost and NRV
Cost is $1,000
NRV is $2,400 – $500 = $1,900
The correct valuation is therefore $1,000
14.2 $226,560
The number of units held at the year-end is 2360 (2,400 – 40)
The sale on 31 December provides evidence of a NRV $4 below cost.
Therefore each unit should be valued at its NRV.
2,360 units × $96 = $226,560
14.3 C
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