At 1 January 20X2, Braun Company's trade receivables were totaled $500,000. A specific allowance of $10,000 had been made for Andrew Co- a credit customer who has the 6 months overdue balance of $30,000 and there is no other general allowance for receivables at this time. During the year, Andrew Co went bankrupt in December, 20X2 then the financial manager decided to make general allowance 5% at 31.12.20X2 At 31 December 20X2, Braun had total receivables of $600,000 (include the receivable from Andrew). Requirement: i. Critically analyze the accounting concept which can be used in this event relating to trade receivables of Braun Company. ii. What amount should appear in Braun Company's statement of profit or loss for receivable expense for the year ended 31 December 20X2 ii. What amount should appear in Braun Company's statement of financial position for trade receivables for the year ended 31 December 20X2 Note: your answer should show clearly any relevant journal entries.

At 1 January 20X2, Braun Company's trade receivables were totaled $500,000. A specific allowance of $10,000 had been made for Andrew Co- a credit customer who has the 6 months overdue balance of $30,000 and there is no other general allowance for receivables at this time. During the year, Andrew Co went bankrupt in December, 20X2 then the financial manager decided to make general allowance 5% at 31.12.20X2 At 31 December 20X2, Braun had total receivables of $600,000 (include the receivable from Andrew). Requirement: i. Critically analyze the accounting concept which can be used in this event relating to trade receivables of Braun Company. ii. What amount should appear in Braun Company's statement of profit or loss for receivable expense for the year ended 31 December 20X2 ii. What amount should appear in Braun Company's statement of financial position for trade receivables for the year ended 31 December 20X2 Note: your answer should show clearly any relevant journal entries.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 43P

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