) In addition to the above (not included in the $150,000 of sales) was one sale of inventory with a cost of $20,000 and a selling price of $30,000 where the credit manager predicted only a 10% chance of actually getting paid but the transaction was carried out anyway - the terms of the sale required payment in 60 days this amount has not yet been collected and is not yet overdue as at December 31. (Part marks available if you explain your reasoning.)

c) Upon review of the receivables at year end, management has indicted that a specific customer has gone bankrupt and won't be paying the $15,000 that they owe. A further $25,000 of the remaining receivables (not counting the sale described in b) will probably not be collected either. (Normally ABC only reviews their outstanding receivables at year end).