ABC Co makes all sales on credit. At 30 November 20X9, the total receivables balance amounted to $136,400. The following information has come to light a few days after the 30 November 20X9 year end. Fred Willis,who owed ABC Co $44,300 at the year end,has been dedared bankrupt. The liquidators have stated that the maximum ABC Co will receive is $18,000 of the debt owed Flora Bailey,who owed ABC Co $22,500 at the year end, has left the country and has no intention of ever settling her debt. Following the principles in IAS 10, Events after the Reporting Period, what shoul Dresden Co include in the statement of financial position for receivables at 30 November 20X9?
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.
ABC Co makes all sales on credit. At 30 November 20X9, the total receivables balance amounted to $136,400.
The following information has come to light a few days after the 30 November 20X9 year end.
Fred Willis,who owed ABC Co $44,300 at the year end,has been dedared bankrupt. The liquidators have stated that the maximum ABC Co will receive is $18,000 of the debt owed
Flora Bailey,who owed ABC Co $22,500 at the year end, has left the country and has no intention of ever settling her debt.
Following the principles in IAS 10, Events after the Reporting Period, what shoul Dresden Co include in the
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