Part A Albert Trading Limited used the statement of financial position approach to estimate the impairment loss of receivable. An aging of account receivable at 31 December 2019 revealed that S68,000 of the $835,000 outstanding accounts receivable will prove uncollectible. The Allowance for Impairment has a debit balance of $6,200 prior to adjustment. Required: (Explanation of the Journal Entry is not required) Prepare an adjusting entry on 31 December 2019 to recognize the impairment loss of receivable. Part B On 12 January 2020, Peter Lee, a major customer, declared bankruptey, and Albert Trading, determined that a receivable from Peter Lee in the amount of $3,400 was worthless. Required: (Explanation of the Journal Entry is not required) Prepare the journal entry required by Albert Trading in this situation.
Part A Albert Trading Limited used the statement of financial position approach to estimate the impairment loss of receivable. An aging of account receivable at 31 December 2019 revealed that S68,000 of the $835,000 outstanding accounts receivable will prove uncollectible. The Allowance for Impairment has a debit balance of $6,200 prior to adjustment. Required: (Explanation of the Journal Entry is not required) Prepare an adjusting entry on 31 December 2019 to recognize the impairment loss of receivable. Part B On 12 January 2020, Peter Lee, a major customer, declared bankruptey, and Albert Trading, determined that a receivable from Peter Lee in the amount of $3,400 was worthless. Required: (Explanation of the Journal Entry is not required) Prepare the journal entry required by Albert Trading in this situation.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 9E: Estimating Bad Debts from Receivables Balances The following information is extracted from Shelton...
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