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Part II

By December 6, 2021No Comments

Part IIBig Ltd.used the statement of financial position approach to estimate uncollectibleaccount receivable.On 1 January 2021,The Allowance for Impairment showed a creditbalance of S15,000.During 2021,S120,000 of specific accounts receivable were writtenoff as uncollectible.Of these accounts written off,receivables totaling S20,000 weresubsequently collected.The aging schedule of the accounts receivable as at 31December was as follows:Days past dueAccountsEstimatedreceivableuncollectiblepercentageCurrentS550.0001%1-60 days250.0004%61-120days80.0006%Over 120 days20.0008%$900.000Required:(a)Prepare the journal entries to record the amounts written off during 2021.(b)Prepare the journal entries to record the S20,000 in accounts receivable that weresubsequently collected.(c)(i)Calculate the required balance of Allowance of impairment at 31 December2021(show your workings).(ii)Calculate the amount of the Impairment Loss of Receivable to be adjustedfor the year (show your workings).(d)Prepare the adjusting entries to bring the Allowance for Impairment to the properamount on 31 December 2021.

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