Question:
You are analysing a large international education company that provides distance learning solutions, The New Age Ltd. You are concerned about the quality of the reported revenue and have gathered the following information from the 2016 financial statements:
|
R'000
|
2016
|
|
2014
|
|
2015
|
|
Revenue - as reported
|
230 000
|
210 500
|
220 000
|
|
Accounts Receivable
|
50 411
|
31 719
|
33 151
|
|
Provision for bad debts
|
504
634
|
|
663
|
|
|
|
Inventory
|
46 000
|
35 083
|
36 667
|
|
Deferred revenue
|
12 105
|
23 389
|
24 444
|
|
Accounts payable
|
14 178
|
12 976
|
13 562
|
|
|
Required:
1 Determine the actual revenue collected during the 2015 and 2016 years. Show all your workings.
2 Calculate the following for the 2015 and 2016 years:
- Debtors' collection period
- Percentage of bad debt provision relative to debtors
- Deferred revenue as a percentage of reported revenue.