ABCDoggard Có is a business that sells second hand cars. If a car develops a fault within 30 days of thesale, Doggard Co will repair it free of charge.12.7At 30 April 20X4 Doggard Co had made a provision for repairs of $2,500. At 30 April 20X5 Doggard Cocalculated that the provision should be $2,000.What entry should be made for the provision in Doggard Co's statement of profit or loss for the year to30 April 20X5?(2marked liabilityA charge of $500A credit of $500A charge of $2,000ut 5% of

Doggard Co needs to reduce the provision by $500 ie a credit to the statement of profit or loss.

Answered: ABC Doggard Có is a business that sells…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On June 1, Entity A sold Product XX2 for P50,000 with a cost price of P30,000. Credit terms is 2/10, n/30. On June 15, P10,000 worth of Product XX2 was received due to wrong specifications. The buyer availed of the discount period and paid on June 10. What is the gross profit of Entity A for Product XX2?
Keiasia Coates Company sold merchandise for $2,000. The cost of the merchandise was $1,500. Five days later, the customer returns 20% of the merchandise, which is defective, and is not restored to Keasia Company’s merchandise inventory. On day 10, the customer sends a check for the amount due. Assuming the net method, indicate how these transactions combined would affect the following five financial statement items: assets, liabilities, owners equity, revenue, and expenses? Answer: assets:increase, Liabilities: decrease, owners equity:increase, revenue:increase, expenses: increase why and how would liabilites be decreased in this scenario? explain process to answer of this problem
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