Placing an order

A.of placing

B.table-cloths

C.at

D.offered

A．letter of invitation

B．letter of consolation

C．letter of thanks

D．Letter or placing an order

()？

It includes merchandise, packaging and shipping, duty if required, any taxes and insurance.

A、 Could I get an estimate before placing an order

B、 What does the estimate include

C、 How many would you like to order

：A.现回复贵方5月10日大豆报价函，订购订单。

B.现回复贵方大豆报价函，试订购如所购订单。

C.现回复贵方5月10日报价函，试订购如所购订单。

D.现回复贵方5月10日大豆报价函，试订购如所购订单。

Dear Sir,

We are a leading dealer in waterproof garments． Our customers have expressed interest in your raincoats and enquired about their quality．

Provided quality and price are satisfactory there are prospects of good sales here, but before placing a firm order we want to make a trial salE．We should be glad if you would send us, on fourteen day's approval, a selection of men's and women's raincoats． Any of the items unsold at the end of the period, and which we decide not to keep as stock, would be returned at our expense．

We look forward to hearing from you soon．

Yours sincerely,

statements for the year ended 31 May 2006 and has asked for advice on how to deal with the following items:

(i) Tyre requires customers to pay a deposit of 20% of the purchase price when placing an order for a vehicle. If the

customer cancels the order, the deposit is not refundable and Tyre retains it. If the order cannot be fulfilled by

Tyre, the company repays the full amount of the deposit to the customer. The balance of the purchase price

becomes payable on the delivery of the vehicle when the title to the goods passes. Tyre proposes to recognise

the revenue from the deposits immediately and the balance of the purchase price when the goods are delivered

to the customer. The cost of sales for the vehicle is recognised when the balance of the purchase price is paid.

Additionally, Tyre had sold a fleet of cars to Hub and gave Hub a discount of 30% of the retail price on the

transaction. The discount given is normal for this type of transaction. Tyre has given Hub a buyback option which

entitles Hub to require Tyre to repurchase the vehicles after three years for 40% of the purchase price. The normal

economic life of the vehicles is five years and the buyback option is expected to be exercised. (8 marks)

Required:

Advise the directors of Tyre on how to treat the above items in the financial statements for the year ended

31 May 2006.

(The mark allocation is shown against each of the above items)

From a different supplier, Nesud Co purchases $2·4 million per year of Component K at a price of $5 per component. Consumption of Component K can be assumed to be at a constant rate throughout the year. The company orders components at the start of each month in order to meet demand and the cost of placing each order is $248·44. The holding cost for Component K is $1·06 per unit per year.

The finance director of Nesud Co is concerned that approximately 1% of credit sales turn into irrecoverable debts. In addition, she has been advised that customers of the company take an average of 65 days to settle their accounts, even though Nesud Co requires settlement within 40 days.

Nesud Co finances working capital from an overdraft costing 4% per year. Assume there are 360 days in a year.

Required:

(a) Evaluate whether Nesud Co should accept the early settlement discount offered by its supplier. (4 marks)

(b) Evaluate whether Nesud Co should adopt an economic order quantity approach to ordering Component K. (6 marks)

(c) Critically discuss how Nesud Co could improve the management of its trade receivables. (10 marks)