Question
The COVID-19 pandemic has affected one of your customers, NEST Ltd adversely. Even though the economies are fast recovering, they have contacted your company to
The COVID-19 pandemic has affected one of your customers, NEST Ltd adversely. Even though the economies are fast recovering, they have contacted your company to request to purchase on credit instead of cash on delivery. Your boss, Alan, the Marketing Manager has instructed you to review their request. He has asked you to review NEST Ltds latest set of financial statements.
Required:
(a) Identify the key financial statements. Explain how the information reported in these statements will help you to decide whether to accede to NEST Ltds request. (30 marks)
(b) In addition, identify other information that will be helpful in deciding whether to accede to NEST Ltds request? (5 marks) Total word count for (a) and (b) should not exceed 700 words.
(c) You have also noticed that compared to last year, the allowance for bad debt for Nest Ltd has increased from 2% to 4 % of the accounts receivable. Discuss how this information will impact your review. (5 marks)
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