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Hi
Does anyone know why in part 3 of section 5 we deduct the difference between the inventory allowance as opposed to the actual inventory allowance.
In the book, the answer is
10,016
+685
-195 (tax, i get this part)
= 10506
why isn't it
10016
+3522
-1004
=12534
I understand that in part 2 we use the difference between 08-07 and 07-06 but that is because it says that the change to the allowance in inventory is reflected in the cost of sales but then why is that so in part 3? Part 3 discusses inventory write-downs not a change in inventory allowance. I'm just a little confused.
Thanks in advance.
Edited 1 time(s). Last edit at Sunday, October 24, 2010 at 01:38PM by canadiananalyst. |
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