Answered step by step
Verified Expert Solution
Question
1 Approved Answer
At 31 March 2020, Western's trade debtors amounted to $60,000. At 31 March 2021 irrecoverable debts of $500, which Western decided to write off. Following
At 31 March 2020, Western's trade debtors amounted to $60,000. At 31 March 2021 irrecoverable debts of $500, which Western decided to write off. Following this write off, Western adjusted his allowance for impairment loss on trade receivables to 2% of debtors. On 1 January 2021, Western received a cheque from a trade debtor payment of $900 in respect of outstanding sales invoices balances previously written off in March 2019. The balance on the allowance for impairment loss on trade receivables at 31 March 2020 was $800. Required Prepare the following accounts for the year ended 31 March 2021 and carry down the closing balances to 1 April 2021 if it is appropriate: 6) Trade receivables (4 marks) Irrecoverable debts (3 marks) (3 marks) Irrecoverable debts recovered Allowance for impairment loss on trade receivables (14) (3 marks) (7 marks) Explain the significance of the closing balance of allowance for impairment loss on trade receivables (ALL workings must be shown) Total: (20 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started