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assembly lines, potentially causing a defect in the output. As ar d. Assuming a 12% estimated return rate, what would be the ent

assembly lines, potentially causing a defect in the output. As ar d. Assuming a 12% estimated return rate, what would be the ent

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At year end, Blossom Inc. started the process to review its $2800000 of accounts receivable to estimate what amount outstanding could potentially be returned by the customer. There was a recent memo from the production manager that stated a process error was found in one of the assembly lines, potentially causing a defect in the output. As a result, a significant amount of product is expected to be returned. Assuming a 12% estimated return rate, what would be the entry to journalize this under IFRS? Allowance for Expected Credit Losses Accounts Receivable Sales Revenue Refund Liability Sales Returns and Allowances Allowance for Sales Returns and Allowances Loss on Impairment Allowance for Expected Credit Losses 336000 336000 336000 336000 336000 336000 336000 336000
Transcribed Image Text:At year end, Blossom Inc. started the process to review its $2800000 of accounts receivable to estimate what amount outstanding could potentially be returned by the customer. There was a recent memo from the production manager that stated a process error was found in one of the assembly lines, potentially causing a defect in the output. As a result, a significant amount of product is expected to be returned. Assuming a 12% estimated return rate, what would be the entry to journalize this under IFRS? Allowance for Expected Credit Losses Accounts Receivable Sales Revenue Refund Liability Sales Returns and Allowances Allowance for Sales Returns and Allowances Loss on Impairment Allowance for Expected Credit Losses 336000 336000 336000 336000 336000 336000 336000 336000
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