Haw and entity determined gs inventory on hand by way of a physical stock take? b. Explain how an entity determine cost of goods sold under alternative Cost flow assumption for the period, inventory...

Q. 1
Sol.: The Company CYCLOPHARM LIMITED (CYC), produces and supplies the medical
profession with proprietary lung radiopharmaceuticals.
a) Accounts receivable appears to be an important asset for this company as trade
receivables are almost 44.34% (i.e. $3,852,356 / $8,687,324) to the total current assets*
and about 18.09% (i.e. $3,852,356 / $21,293,213) to the total assets* of the company.
Trade receivables play an important role in companies business. Trade receivables
decide the liquidity of the funds in business and proper rotation of trade receivables is a
very important factor for analyzing the cash flow from operations. Trade / accounts
receivables can adversely affect the business of the company. If any significant amount
of account receivables get impaired due to any reasons it directly affect not only the
profitability but also the cash flow of the company.
*(Total current assets and total assets of the company are mentioned on page no. 37 of
the annual report)
b) At the latest balance sheet date (31st December 2011) customer owe the business a
sumo of $3,852,356 as evident from the page no. 61 of the Annual Report i.e. schedule
8 to the Statement of Financial Position.
c) Company expects to collect full amount of accounts receivables at the latest financial
year end. It is clearly evident from the page...