TIMO Ltd sells electronic components to various retailers. For the year 20X1 the following transactions were documented: One of their customers, MIA Ltd ordered 1,000 components on March the 1st for EUR 200 per unit. TIMO Ltd delivered the goods on March 15th and sent an invoice the next day. The cost per unit sold was EUR 120. At the end of the year the accountants got information that TIMO Ltd has been experiencing financial difficulties. Despite multiple attempts to collect payment, TIMO Ltd has not paid its outstanding invoice. Another customer, SHIRIN Ltd ordered 1,500 components in November for EUR 180 per unit. An invoice was sent immediately afterwards. The cost per unit sold was EUR 120. SHIRIN Ltd paid EUR 90,000 at the beginning of December. SHIRIN Ltd is a trustworthy customer. There are no known financial problems. Emma Ltd ordered 600 components in June for EUR 190 per unit. An invoice was sent immediately afterwards. The cost per unit sold was EUR 120. At the end of the year TIMO Ltd have received the news from the court that Emma Ltd is bankrupt. No payments are therefore to be expected from Emma.

TIMO Ltd sells electronic components to various retailers. For the year 20X1 the following transactions were documented: One of their customers, MIA Ltd ordered 1,000 components on March the 1st for EUR 200 per unit. TIMO Ltd delivered the goods on March 15th and sent an invoice the next day. The cost per unit sold was EUR 120. At the end of the year the accountants got information that TIMO Ltd has been experiencing financial difficulties. Despite multiple attempts to collect payment, TIMO Ltd has not paid its outstanding invoice. Another customer, SHIRIN Ltd ordered 1,500 components in November for EUR 180 per unit. An invoice was sent immediately afterwards. The cost per unit sold was EUR 120. SHIRIN Ltd paid EUR 90,000 at the beginning of December. SHIRIN Ltd is a trustworthy customer. There are no known financial problems. Emma Ltd ordered 600 components in June for EUR 190 per unit. An invoice was sent immediately afterwards. The cost per unit sold was EUR 120. At the end of the year TIMO Ltd have received the news from the court that Emma Ltd is bankrupt. No payments are therefore to be expected from Emma.

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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