Question
The following item is documented in the audit working papers of B&D Ltd on 30th june 2020: 1.The provision for doubtful debts in the balance
The following item is documented in the audit working papers of B&D Ltd on 30th june 2020:
1.The provision for doubtful debts in the balance sheet at June 2020 total $480,000; the company policy states that provision for doubtful debts should 396 of the total outstanding accounts receivable balance. The balance of the account receivable is $20000000
2.Advertising transaction not included in the year ended 30th june 2020, but included in 15th July 2020 but evidente from cut.off procedure suggests that the advertising expense should be dated in 30th june 2020 for the amount of $800,000.00
Evaluate the item above and state which accounts would be affected, and how, if adjustment is required, provide the adjusting entries.
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