Question

Prepare a 5 page memo and answer the following questions;

1. Discuss the conflicting information need requirements of at least 5 users of financial statement
2. Propose a model of financial reporting that addresses the conflicting nature of financial statement users
3. Justify your solution to manage the conflict

Answer 1

Computation of Net Proceeds :
Cash Received	$                                    1,78,900.00
Less : Recourse Liability	$                                       (3,390.00)
Net Proceeds	$                                     1,75,510.00
Computation of Gain or Loss :
Carrying Value	$                                    2,42,700.00
Net Proceeds	$                                     1,75,510.00
Loss on sale of receivables	$                                       67,190.00
Journal Entry :
Accounts title and explaination	Debit	Credit
Cash	$                                    1,78,900.00
Loss on sale of receivables	$                                       67,190.00
Recourse Liability		$                   3,390.00
Account Receivable		$              2,42,700.00
(To Record loss on sale of receivables in books of pharoah inc.)