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iscuss whether Bauk Consumer Electrical Berhad can derecognize AM Supplier from company’s book on 31 December 2021.

iscuss whether Bauk Consumer Electrical Berhad can derecognize AM Supplier from company’s book on 31 December 2021.

Essentials Of Investments
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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  1. 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:

  1. Discuss whether Bauk Consumer Electrical Berhad can derecognize AM Supplier from company’s book on 31 December 2021.

 

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