The following information is available about the companies Fuma and Spuna for the year 2022. -----------------------------------Fuma ---------------- Spuna Accounts receivable: ----- 1,350,000 ---------- 1,140,600 Write-off of receivables: --- 27,000 -------------- 17,100 Year 1 revenue: ------------14,360,000 --------- 8,650,600 a) What is the turnover rate of trade receivables at Fuma and Spuna for the year 2022? What are accounts receivable average days outstanding? b) Provided that both companies estimate the provision for write-down of trade receivables as percentage of the balance of trade receivables, what is the write-down percentage that each company about itself is to use?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
The following information is available about the companies Fuma and Spuna for the year 2022.
-----------------------------------Fuma ---------------- Spuna
Accounts receivable: ----- 1,350,000 ---------- 1,140,600
Write-off of receivables: --- 27,000 -------------- 17,100
Year 1 revenue: ------------14,360,000 --------- 8,650,600
a) What is the turnover rate of trade receivables at Fuma and Spuna for the year 2022? What are accounts receivable average days outstanding?
b) Provided that both companies estimate the provision for write-down of trade receivables as percentage of the
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