Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
- On 15 May 2021, Bauk Consumer Electrical Berhad sent a Purchase Order to AM Supplier requesting for some raw materials. On 3 June 2021 company received the raw materials together with an invoice worth RM88,800. Additional costs incurred include delivery charges of RM1,900 and insurance on purchase of RM1,660.
On 5 September 2021, company paid half of the outstanding debt to AM Supplier by cheque and received 10% discount given by the supplier.
On 28 December 2021, company paid the remaining balance to AM Supplier by issuing a cheque.
Required:
- Discuss whether Bauk Consumer Electrical Berhad can derecognize AM Supplier from company’s book on 31 December 2021.
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