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describe a circumstance m c Weighing Alternatives Change in Estimate versus Error Correction Facts: You are the owner of a la company (LawnCo) which provides

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describe a circumstance m c Weighing Alternatives Change in Estimate versus Error Correction Facts: You are the owner of a la company (LawnCo) which provides grounds and maintenance services to a range of corporate customers. Customers SUril t are expected to pay on the first of each month, in advance of receiving services. One of your corporate customers is an eldercare facility whose grounds you have maintained for many years. The customer has not paid for the last three rvices (from Oct.-Dec. 20X1); nevertheless, to maintain a positive relationship, your company contin- uring that time. Your company ceased d out in that same month that the eldercare facility filed for bankruptcy months of se ued to provide mowing and weed control services to the eldercare facility d providing services in January 2 in September. Your company now believes that collection of the missed payments is extremely unlikely nd foun Your company has already issued financial statements to lenders (for the period ending 12/31/XI) which reflected revenue and a corresponding account receivable related to this customer of $10,000 per month for services provided to this customer. Those financial statements also reflected the company's standard allowance (reserve) amount on receivables, of 4% of sales. In total, your company's average monthly sales amount to S500.000. Required 1. Evaluate whether receipt of this information indicates you have a change in accounting estimate or whether the customer's bankruptcy should result in this event being considered an error in previously issued financial statements 2. Next, describe the accounting treatment (as required by the Codification) for each alternative, then support your 3. Finally, briefly state which treatment appears to be more appropriate given the circumstances. If you must make explanations with draft journal entries. any assumptions in reaching this conclusion, state these. e the Coodwill Aecountine Alternative Availahle to Private Cnmnani

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