QuestionPart AAlbert Trading Limited used the statement of financial position approach to estimate theimpairment loss of receivable. An aging of account receivable at 31 December 2019 revealedthat S68,000 of the S835,000 outstanding accounts receivable will prove uncollectible. TheAllowance 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 BOn 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 joumal entry required by Albert Trading in this situation.

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Answered: Question Part A Albert Trading Limited…

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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The Phillips Company gathered the following information pertaining to its year ended December 31, 2020 prior to any adjustments: Net Sales for the Year $780,000 Accounts Receivable, 12/31 165,000 Allowance for Uncollectible Accounts, 12/31 2,200 Debit Assume that Phillips uses the percentage of outstanding accounts receivable method for uncollectible amounts. An aging of accounts receivable indicates that $9,550 will be uncollectible. Phillips will report the following amounts in its 2020 financial statements: Select one: a. Bad debts expense $11,750; Net accounts receivable $155,450 b. Bad debts expense $9,550; Net accounts receivable $155,450 c. Bad debts expense $9,550; Net accounts receivable $157,650 d. Bad debts expense $1,750; Net accounts receivable $157,650 e. Bad debts expense $7,350; Net accounts receivable $157,650
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