Covex Ltd (Covex) has net sales of $2.69 million for the financial year ended 31 December...
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Covex Ltd (Covex) has net sales of $2.69 million for the financial year ended 31 December 2021. It gives a credit period of 30 days to its customers. Management review for impairment of accounts receivables noted that the Accounts Receivables balance as at 31 December 2021 was $413,000 comprising of the following outstanding sales invoices: Invoice Number Not yet due.. 1-30 days.... G0007 G0011 G0018 G0028 G0033 G0048 G0055 (i) Invoice Date 31-60 days....... More than 60 days. Required 29 September 2021 5 October 2021 9 October 2021 7 November 2021 14 November 2021 5 December 2021 18 December 2021 The Accounts Receivables (AR) and Allowance for Impairment of AR of the company were $125,000 and $4,800 respectively on 1 January 2021. The company complies with all Singapore Financial Reporting Standards. Based on its past experience with collections, the company estimated the percentages of uncollectible accounts receivable to be as follows: 1% 3% .10% .30% Invoice Amount $11,000 $17,000 $20,000 $48,000 $42,000 $125,000 $150,000 Invoice # Not Yet Due Prepare an ageing schedule for the list of outstanding sales invoices using the following format: 1-30 days Age of account 31-60 days More than 60 days (3 marks) (ii) Compute the amount of uncollectible accounts based on the above classification by age groups. (iii) On 24 December 2021, an old customer whose account had already been written off in the books of Covex paid the company the outstanding sum of $9,000. Journalise this transaction. (iv) Prepare the adjusting entry needed to bring the Allowance for the Impairment of AR Account to the proper amount as at the year ended 31 December 2021. Compute and evaluate the average collection period (rounded up in days) of Covex. Covex Ltd (Covex) has net sales of $2.69 million for the financial year ended 31 December 2021. It gives a credit period of 30 days to its customers. Management review for impairment of accounts receivables noted that the Accounts Receivables balance as at 31 December 2021 was $413,000 comprising of the following outstanding sales invoices: Invoice Number Not yet due.. 1-30 days.... G0007 G0011 G0018 G0028 G0033 G0048 G0055 (i) Invoice Date 31-60 days....... More than 60 days. Required 29 September 2021 5 October 2021 9 October 2021 7 November 2021 14 November 2021 5 December 2021 18 December 2021 The Accounts Receivables (AR) and Allowance for Impairment of AR of the company were $125,000 and $4,800 respectively on 1 January 2021. The company complies with all Singapore Financial Reporting Standards. Based on its past experience with collections, the company estimated the percentages of uncollectible accounts receivable to be as follows: 1% 3% .10% .30% Invoice Amount $11,000 $17,000 $20,000 $48,000 $42,000 $125,000 $150,000 Invoice # Not Yet Due Prepare an ageing schedule for the list of outstanding sales invoices using the following format: 1-30 days Age of account 31-60 days More than 60 days (3 marks) (ii) Compute the amount of uncollectible accounts based on the above classification by age groups. (iii) On 24 December 2021, an old customer whose account had already been written off in the books of Covex paid the company the outstanding sum of $9,000. Journalise this transaction. (iv) Prepare the adjusting entry needed to bring the Allowance for the Impairment of AR Account to the proper amount as at the year ended 31 December 2021. Compute and evaluate the average collection period (rounded up in days) of Covex.
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Related Book For
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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