Please Please Please solve these two Please

Part1

ABC Manufacturing Ltd ("ABC") is a diverse manufacturing group in the electronics sector with its headquarters in Australia. It has a 31 December year end and is listed on the Australian Securities Exchange.

One of ABC's divisions manufactures a range of digital entertainment products. Under the terms of the contract for sale, the manufacturer must provide a standard one-year warranty, undertaking to make good, by repair or replacement, manufacturing defects that become apparent within a one year from the date of sale. On past experience, it is more likely than not that there will be some claims under the warranties.

During 2018, ABC sold 500 units of a new line of high-performing web cams for $500 each.It has reviewed its past experience based on sales of similar web cams and expects that 40% of the items sold will have major defects incurring a warranty cost of $25 per unit sold.It is estimated that 35% of items sold will have minor defects and will incur a warranty cost of $15 per unit sold.25% of products sold will have no defects.ABC expects these costs to be incurred evenly over the warranty period.

The company's accountant believes that the warranty costs for the new web cams should be recognised in the Income Statement at the time they are incurred as there is no history of cost incurred specific to this product.

Required:

a)Discuss if the company has an obligation that meets the criteria stipulated in AASB 137 Provisions, Contingent Liabilities and Contingent Assets and Conceptual Framework.

b)Calculate warranty cost per items sold for the year ended 31 December 2018.

c)Prepare the journal entry to record the estimated warranty expense based on the units sold.

Part 2

On 31 March 2018, the following balances were taken from the trial balance of Isaac Trading Limited:

Accounts receivable $400,000

Allowance for doubtful debts$19,500

Net credit sales $5,200,000

Isaac Trading uses the allowance method for accounting for bad debts and identifies the amount on the basis of 5% of net credit sales.

The above accounts receivable includes $6,000 due from XYZ Ltd which was outstanding for more than 150 days.On 31 March 2018, Isaac Trading received notification that XYZ Ltd was insolvent and would be unable to pay their account.

On 31 May 2018, Isaac received notification from the liquidator and $3,200 in settlement of the XYZ's previous outstanding debt.

Required:

a)Prepare the journal entry to write off the debt outstanding by XYZ Ltd on 31 March 2018.

b)Prepare the journal entry to adjust the balance for allowance for doubtful debts on the basis of 5% of net credit sales and determine the balance in the allowance for doubtful debts on 1 April 2018.

c)Prepare the journal entry to record the settlement received from XYZ Ltd's liquidator.

The two new accounting interns were discussing the classification of receivables.One commented "Classification of receivables as current or non-current is not that important.The money is received eventually so what is the big deal?".Discuss the importance of the appropriate classification of receivables and how it could impact on decision making.