The trial balance as at 31 December 2018 of Beauty Cosmetics
Company (“Beauty Cosmetics”) included the following accounts:
Accounts receivable at 31 December 2018 $90,000
Allowance for impairment $10,700 (Dr)
During 2019, total sales amounted to $1,200,000, of which 70%
was credit sales. Total receipts from credit customers were
$600,000. Besides, $61,000 of accounts receivables was proven to be
uncollectible and were written off. At the end of the year, an
aging of the accounts receivable indicated the estimated
uncollectible amount for accounts receivables was $15,000. The
company adjusts its account annually.
(a) Prepare journal entries to record the impairment loss of
receivable in 2019 under Statement of Financial Position approach.
(b) Prepare partial Statement of Financial Positions to show the
accounts receivables as at 31 December 2019. (4 marks)