Question
Pachel Corporation reports the following information pertaining to its accounts receivable: Days Past Due Current 130 3160 6190 Over 90 $ 60,000 $ 40,000 $
Pachel Corporation reports the following information pertaining to its accounts receivable: |
Days Past Due | ||||
Current | 130 | 3160 | 6190 | Over 90 |
$ 60,000 | $ 40,000 | $ 25,000 | $ 12,000 | $ 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 | 2 | % |
Receivables 130 days past due | 4 | |
Receivables 3160 days past due | 16 | |
Receivables 6190 days past due | 40 | |
Receivables over 90 days past due | 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 Journal | Debit | Credit |
(Click to select)Accounts receivableMarketable securitiesCashGain on sale of investmentsAccounts payableLoss on sale of investmentsAllowance for ImpairmentImpairment loss of receivable | ||
(Click to select)Loss on sale of investmentsAccounts receivableImpairment loss of receivableGain on sale of investmentsCashMarketable securitiesAccounts payableAllowance for Impairment | ||
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)Marketable securitiesImpairment loss of receivableGain on sale of investmentsCashAccounts receivableLoss on sale of investmentsAllowance for ImpairmentAccounts payable | ||
(Click to select)Allowance for ImpairmentAccounts payableGain on sale of investmentsAccounts receivableLoss on sale of investmentsImpairment loss of receivableCashMarketable securities | ||
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