Question
In each of the situations below, state whether the financial asset and financial liability may be offset in the books of Sunset Tours Ltd A
In each of the situations below, state whether the financial asset and financial liability may be offset in the books of Sunset Tours Ltd A as at 30 June 2019 and explain why.
(a) Sunset Tours Ltd owesHelicopter Ltd $500000, due on 30 June 2020. Joyflights Ltdowes Sunset Tours Ltd$300000, due on 30 June 2020.
(b) Sunset Tours Ltd owes Darwin Accommodation Ltd $500000, due on 30 June 2020. Darwin Accommodation Ltd owes Sunset Tours Ltd $500000, due on 30 June 2020. A legal right of set-off between the two companies is documented in writing, and the parties have indicated their intent to settle the amounts on a net basis.
(c) Sunset Tours Ltd owes Global Holidays Ltd $500000, due on 30 June 2021. Sunset Tours Ltd has plant and equipment with a fair value of $500000 that Global Holidays Ltd has secured as collateral for the debt to Sunset Tours Ltd.
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Managerial Accounting Tools For Business Decision Making
Authors: Jerry J Weygandt, Paul D Kimmel, Jill E Mitchell
9th Edition
1119754054, 9781119754053
