标题: Ch 21 Example 5, iii [打印本页] 作者: maratikus 时间: 2011-7-11 19:05 标题: Ch 21 Example 5, iii
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.作者: mengxu 时间: 2011-7-11 19:05
Now that I'm on part 4, i'm even more confused
wouldn't it be
10,016
+685
+822
-(0.285 X 1507)
= 11094
as opposed to
10,016
+3522
-1004
= 12,534
If the section in part 3 uses the write down as the difference between the allowance in 08 and 07
then if we are reversing all previous write downs, wouldn't it be the same of the diff in 08-07 and 07-06?
Edited 1 time(s). Last edit at Sunday, October 24, 2010 at 02:04PM by canadiananalyst.
