You are the owner of a lawn service company (Grass Man). Your slogan is, Who is that
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Your company has already issued financial statements to lenders (for the period ending 12/31/2015) which reflected revenue and a corresponding account receivable related to this customer of $10,000 per month for services that your company provided to the eldercare facility. Those financial statements also reflected the company's standard allowance (reserve) amount on receivables, of 4% of sales. In total, your company's average monthly sales amount to $500,000.
Evaluate whether finding out about your client's bankruptcy indicates that you have a change in accounting estimate or an error in previously issued financial statements. Describe the accounting treatment (as required by the Codification) that appears to be more appropriate given the circumstances. State any assumptions that you make in reaching your conclusion.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For
The Legal and Regulatory Environment of Business
ISBN: 978-0078023859
17th edition
Authors: Marisa Pagnattaro, Daniel Cahoy, Manning Magid, Lee Reed, Pe
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