Pachel Corporation reports the following information pertaining to its accounts
ID: 2524514 • Letter: P
Question
Pachel Corporation reports the following information pertaining to its accounts receivable Days Past Due Current $ 60,000 1-30 $40,000 31-60 $25,000 61-90 $ 12,000 Over 90 $2,000 The company's credit department provided the following estimates regarding the percent of accounts expected to eventually be written off from each category listed above Current receivables outstanding Receivables 1-30 days past due Receivables 31-60 days past due Receivables 61-90 days past due Receivables over 90 days past due 2% 4 40 90 The company uses a statement of financial position approach to estimate credit losses a. Record the company's impairment loss of receivable, assuming it has a $1,400 credit balance in its Allowance for Impairment prior to making the necessary adjustment. (Omit the "$" sign in your response.) General Journa Debit Credit (Click to select) (Click to select) b. Record the company's impairment loss of receivable, assuming it has a $1,600 debit balance in its Allowance for Impairment prior to making the necessary adjustment. (Omit the "$" sign in your response.) General Journal Debit Credit (Click to select) (Click to select)Explanation / Answer
Answer
Accounts expected to eventually be written off:
a.Record the company’s uncollectible accounts expense:
b.Record the company’s uncollectible accounts expense:
Particulars Current 1-30 31-60 61-90 Over 90 Total Calculation 60000*2% 40000*4% 25000*16% 12000*40% 2000*90% uncollectible accounts expense 1200 1600 4000 4800 1800 $13400Related Questions
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