龚玲玲ccaa.F3 EP网课 (6).pdf

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1、Irrecoverable Debts and Allowances考试类型考试类型考题数量考题数量分值分值难度难度Section A1 Qs2marksSection B1-2 Qs2-3marks02020303Irrecoverable debts - Doubtful debtsIrrecoverable debts Bad debts Irrecoverable Debts and Allowances0101Credit control0404Impact on financial statements 2.1 Initial measurement 2.2 Subsequent

2、treatment2.1 Initial measurement 2.2 Subsequent treatment1. Credit control Credit sales Trade receivables RiskDr: Trade receivable100 (SOFP A+) Cr: Sales revenue100 (SPLIn+)Slow payment Non-payment Credit controlCredit limit Aged receivable analysis Trade receivable (SOFP A+） Customer is probable to

3、 payProbable receivable Receivables Definitely irrecoverable Irrecoverable debts (bad debt)Possibly irrecoverable Irrecoverable debts (doubtful debt)Dr: Trade receivable100 (SOFP A+) Cr: Sales revenue100 (SPLIn+)Trade receivable (SOFP A+） Customer is probable to payProbable receivable Receivables De

4、finitely irrecoverable Irrecoverable debts (bad debt)Possibly irrecoverable Irrecoverable debts (doubtful debt)Dr Irrecoverable debts expense bad debts 10 (SPLE+) Cr Trade receivables10 (SOFP A-)Dr Irrecoverable debts expense doubtful debts 5 (SPLE+) Cr Allowance for receivables5 (SOFP A-)SOFPReceiv

5、ables (after bad debt) 90-Allowance for receivable （5）=Net receivables 8502020303Irrecoverable debts - Doubtful debtsIrrecoverable debts Bad debts Irrecoverable Debts and Allowances0101Credit control0404Impact on financial statements 2.1 Initial measurement 2.2 Subsequent treatment2.1 Initial measur

6、ement 2.2 Subsequent treatment Bad debt incurredIf a debt is definitely irrecoverable it should bewritten off to the statement of profit or loss as bad debt.2. Irrecoverable debts Bad debts 2.1 Initial measurement Example 1. Co. A had trade receivables at 31.12.20X1 of $1000, a customer Mike who owe

7、s $50,have gone bankrupt.Dr Irrecoverable debts expense bad debts 50 (SPL E+)Cr Trade receivables50 (SOFPA-)2.2 Subsequent measurement Bad debt incurred last year, customer paid this year Example 2. At 31.12. 20X2 customer Mike paid back the amount owed of $50第一步：第一步：Reverse original written off Dr

8、Trade receivables50 (SOFPA+) Cr Irrecoverable debts expense bad debts 50 (SPLE-)第二步：第二步：Record cash received Dr Cash50 (SOFP A+) Cr Trade receivables50 (SOFP A-)或者或者，In short form Dr Cash50 (SOFP A+) Cr Irrecoverable debts expense bad debts 50 (SOFP E-)方法一方法二Note: no effect on trade receivables02020

9、303Irrecoverable debts - Doubtful debtsIrrecoverable debts Bad debts Irrecoverable Debts and Allowances0101Credit control0404Impact on financial statements 2.1 Initial measurement 2.2 Subsequent treatment2.1 Initial measurement 2.2 Subsequent treatment3. Irrecoverable debts Doubtful debts 3.1 Initia

10、l measurement Doubtful debts incurred If a debt is possibly irrecoverable and allowance for the potential recoverability of that debt should be made. Include two types:Example 3. Co. B had trade receivables at 31.12. 20X1 of $1200. There is uncertainty whether debt owed by customer Joy $150 is recov

11、erable.Dr Irrecoverable debts expense doubtful debts 150(SPLE+) Cr Allowance for receivables150(SOFP A-)Example 4. Co. C had trade receivables at 31.12. 20X1 of $1200. Customer Mikes owes $50 has gone bankruptcy. there is uncertainty as to whether a debt owed by customer Joy of $150 is recoverable.

12、With past experience, there is 10% allowance should be made.Dr Irrecoverable debts expense(50+150+100)300(SPLE+) Cr Trade receivables50(SOFP A-) Cr Allowance for receivables(150+100)250(SOFP A-)Trade receivables 1200 Less: bad debts (50) Trade receivables 1150 Less: specific allowance (150) 1000 Gen

13、eral allowance10% 100 Specific allowance 150 Total allowance 250必胜口诀必胜口诀(1) Specific allowance(2) General allowanceDoubtful debts incurred Example 5-1. Co. B had trade receivables at 31.12. 20X1 of $1200. There is uncertainty as to whether a debt owed by customer Joy of $200 is recoverable.If there

14、is already an allowance in the accounts (opening allowance) , only make accounting entry for the movement to the allowance for receivablesMovement of allowance increase Example 5-2. At 31.12. 20X2 Co. B had trade receivable of $3000. the general allowance is 10%Dr Irrecoverable debts expense doubtfu

15、l debts 200(SPLE+) Cr Allowance for receivables200(SOFP A-)Dr Irrecoverable debts expense doubtful debts 100(SPLE+) Cr Allowance for receivables100(SOFP A-)Movement of allowance - decrease Example5-3. At 31.12. 20X2 Co. B had trade receivable of $3000. the general allowance is 5%Dr Allowance for rec

16、eivables50 (SOFPA+) Cr Irrecoverable debts expense doubtful debts 50 (SPLE-)3.2 Subsequent measurement(1) Change in allowance3.2 Subsequent measurement(2) Specific allowance last year, customer paid this yearDoubtful debts incurred Example 6-1. Co. B had trade receivables at 31.12. 20X1 of $1200. Th

17、ere is uncertainty as to whether a debt owed by customer Joy of $200 is recoverable.Specific allowance last year, customer paid this yearExample 6-2. At 31.12. 20X2 customer Joy paid back the amount owed of $200第一步：第一步：Reverse original allowance Dr Allowance for receivables200 (SOFPA+) Cr Irrecovera

18、ble debts expense doubtful debts 200 (SPLE-)第二步：第二步：Record cash received Dr Cash200 (SOFP A+) Cr Trade receivables200 (SOFP A-)Dr Irrecoverable debts expense doubtful debts 200(SPLE+) Cr Allowance for receivables200(SOFP A-)3.2 Subsequent measurement(3) Specific allowance last year, customer goes ba

19、d this yearDoubtful debts incurred Example 6-1. Co. B had trade receivables at 31.12. 20X1 of $1200. There is uncertainty as to whether a debt owed by customer Joy of $200 is recoverable.Specific allowance last year, customer goes bad this yearExample 6-2. At 31.12. 20X2 customer Joy gone bankruptcy

20、第一步：第一步：Reverse original allowance Dr Allowance for receivables200 (SOFPA+) Cr Irrecoverable debts expense doubtful debts 200 (SPLE-)第二步：第二步：Record bad debt Dr Irrecoverable debts expense bad debt200 (SPLE+) Cr Trade receivables200 (SOFP A-)Dr Irrecoverable debts expense doubtful debts 200(SPLE+) Cr

21、 Allowance for receivables200(SOFP A-)Dr Allowance for receivable Cr Trade receivable Or, in Short form02020303Irrecoverable debts - Doubtful debtsIrrecoverable debts Bad debts Irrecoverable Debts and Allowances0101Credit control0404Impact on financial statements 2.1 Initial measurement 2.2 Subseque

22、nt treatment2.1 Initial measurement 2.2 Subsequent treatment4. Impact on Financial statements -SPLRevenue X Less: cost of sales (X)Gross profit XXLess: other expenses (X)Operating profit XXLess: interest (X)Profit before tax XXLess: tax (X)Profit after tax (net profit) XXStatement of profit or loss

23、(SPL)-Bad debts written off +/- Movement in allowance 4. Impact on Financial statements - SOFPStatement of financial position (SOFP) Non current assets PPE X XX Current assets Inventory X Trade receivable X Bank X XX XX Owners equity Capital X Non current liabilities loan X Provisions X Current liab

24、ilities Accruals X Trade payables X XX Receivables (after bad debt)-Allowance for receivable=Net Trade receivables 口诀一：Allowance 的计算过程Trade receivables 1200Less: bad debts (50)Trade receivables 1150Less: specific allowance (150)1000General allowance10% 100Specific allowance 150Total allowance 250考试技

25、巧考试技巧 计算题计算题 70%70%口诀三：Impact on SPL口诀二：Impact on SOFPReceivables (after bad debt)- Allowance for receivable=Net Trade receivables Bad debts written off 50movement in allowance(120-100) 20(期末allowance-期初allowance) 70考试技巧考试技巧 计算题计算题 70%70%考试技巧考试技巧 分录题分录题 20%20%Bad debt bad debt last year, paid back t

26、his yearAllowanceallowance last year, paid back this yearallowance last year, goes bad this year movement in allowance 考试技巧考试技巧 理论题理论题 10%10%Allowance 有两种general/specificCredit control有两种： credit limit / age analysisBad bebts 使trade receivable直接减少Doubtful debts 产生allowance，receivable 本身不减少net receiv

27、able减少02020303Irrecoverable debts - Doubtful debtsIrrecoverable debts Bad debts Irrecoverable Debts and Allowances0101Credit control0404Impact on financial statements 2.1 Initial measurement 2.2 Subsequent treatment2.1 Initial measurement 2.2 Subsequent treatment31.12.20X1 a company has allowance fo

28、r receivablesof $38,000, which was 5% of the receivable at thatdate.31.12.20X2 receivables totaled $868,500. It wasdecidedtowriteoff$28,500ofdebtsasirrecoverableandtokeeptheallowanceforreceivable at 5% of receivables.(1) What should be charge in statement of profit orloss for the year to 31.12.20X2

29、for receivablerelatedexpenses?A 42,000B 33,925C 70,500D 32,500 (2) What should the receivable be in statement of financial position?798,000口诀三：Impact on SPL口诀一：Allowance 的计算过程Trade receivables 868,500 Less: bad debts (28,500) Trade receivables 840,000 Less: specific allowance (0) 840,000 General all

30、owance5% 42,000 Specific allowance 0 Total allowance 42,000Bad debts written off 28,500 movement in allowance ? 4,000 (期末allowance-期初allowance) 32,500 (42,000-38,000)口诀二：Impact on SOFPReceivables (after bad debt) 840,000 -Allowance for receivable 42,000 =Net Trade receivables 798,000精选必做题精选必做题 - -1

31、1 （计算题（计算题70%70%）Mike has an allowance for receivables at 1 Oct 20X7of $5,000.During the year ended 30 Sep 20X8, Mike wrote offirrecoverable debts of $2,000.At 30 Sep 20X8 he has trade receivables of $150,000and wishes to make an allowance for receivablesequivalent to 4% of outstanding balances.What

32、 should the total receivables expense in thestatement of profit or loss for the year ended 30 Sep20X8 be?$3,000精选必做题精选必做题 - -2 2 （计算题（计算题70%70%）口诀三：口诀三：Impact on SPL(1) Bad debts written off 2,000 (2) Movement in allowance 期初 allowance 5000 期末 allowance ？6000 Increase 1000 3000精选必做题精选必做题 - -3 3 （计算题

33、（计算题70%70%）At 1 April 20X8, there was an allowance for receivables of $3,000.During the year, $1,000 of debts were written off as irrecoverable, and $800 of debts previously written off were recovered.At 31 March 20X9, it was decided to adjust the allowance for receivables to 5% of receivables which

34、 are $20,000.What is the total receivables expense for the year?A. $200 debitB.$1,800 debitC. $2,200 debitD.$1,800 credit口诀三：口诀三：Impact on SPL(1) Bad debts written off 1,000 recovered （800） (2) Movement in allowance 期初 allowance 3000 期末 allowance ？1000 Decrease (2000) Expense decrease (1800) Cr Dr C

35、ash 800 Cr Irrecoverable debt expense 800 20,000 * 5% = 1,000年末receivable 是否要考虑 bad debt 的影响 ？At the beginning of the year, the allowance for receivables was $850. At the year-end, the allowance required was $1,000.During the year $500 of debts were written off, which includes $100 previously includ

36、ed in the allowance for receivables.What is the charge to statement of profit or loss for receivables expense for the year?A. $1,500B.$1,000C.$650D.$550精选必做题精选必做题 - -4 4 （计算题（计算题70%70%）口诀三：口诀三：Impact on SPL(1) Bad debts written off 400 (2) Movement in allowance 期初 allowance 850 allowance goes bad (1

37、00) 750 期末 allowance 1000 Allowance Increase 250 Expense Increase 650Dr Allowance 100 Cr Trade receivable 100 (1) Bad debts written off 500 (2) Movement in allowance 期初 allowance 850 期末 allowance 1000 Allowance Increase 150 Expense Increase 6503.2 Subsequent measurement(3) Specific allowance last ye

38、ar, customer goes bad this yearDoubtful debts incurred Example 6-1. Co. B had trade receivables at 31.12. 20X1 of $1200. There is uncertainty as to whether a debt owed by customer Joy of $200 is recoverable.Specific allowance last year, customer goes bad this yearExample 6-2. At 31.12. 20X2 customer

39、 Mike gone bankruptcy第一步：第一步：Reverse original allowance Dr Allowance for receivables200 (SOFPA+) Cr Irrecoverable debts expense doubtful debts 200 (SPLE-)第二步：第二步：Record bad debt Dr Irrecoverable debts expense bad debt200 (SPLE+) Cr Trade receivables200 (SOFP A-)Dr Irrecoverable debts expense doubtfu

40、l debts 200(SPLE+) Cr Allowance for receivables200(SOFP A-)Dr Allowance for receivable Cr Trade receivable Or, in Short formAt 1 January 20X8, CoA had total receivables of $380,000. A specific allowance of $20,000 had been made for a business customer Andy. The general allowance for receivables was

41、2.5%.During the year, Andy went out of business owing Co A$28,000, none of which is expected to be recovered.At 31 December 20X8, Co A had total receivables of $420,000. There were no specific allowances but the general allowance for receivables was increased to 3%.What is the charge in the statemen

42、t of profit or loss for the year to 31 December for the allowance for receivables and irrecoverable debts?A. $16,400B. $31,600C.$44,400D.$11,600精选必做题精选必做题 - -5 5 （计算题（计算题70%70%）口诀三：口诀三：Impact on SPL(1) Bad debts written off 8000 (2) Movement in allowance 期初29,000 allowance goes bad (20,000) 期末12,600

43、 3600 口诀一：口诀一：Allowance 的计算过程的计算过程期初期初Allowance Trade receivables 380,000 Less: bad debts (0) Less: specific allowance (20,000) 360,000 General allowance2.5% 9,000 Specific allowance 20,000 Total 期初期初allowance 29,000期末期末Allowance Trade receivables 420,000 General allowance3% 12,600 Specific allowance 0 Total 期末期末allowance 12,600http:/Thank You感谢您选择高顿网校 本节结束！