(12.13 X Co sells goods with a one year warranty and had a provision for warranty claims of $64,000 at SI December 20X0. During the year ended 31 December 20X1, $25.000 in claims were pald to0 customers. On 31 December 20X1, X Co estimated that the following claims will be pad n the following year: Scenario Worst case Best case Most likely Probability 5% 20% 75% Anticipated cost $150,000 $25,000 $60,000 What amount should X Co record in the statement of profit or loss for the year ended 31 December 20X1 in respect of the provision? A $57,500 B $6,500 C $18,500 $39,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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