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I Q3. (25 marks) Header The following account balances were found for Jetson Corp. at the...


I Q3. (25 marks) Header The following account balances were found for Jetson Corp. at the beginning of its fiscal year, Janua
I Q3. (25 marks) Header The following account balances were found for Jetson Corp. at the beginning of its fiscal year, January 1, 2020: Accounts Receivable $1,240,250 Allowance for Doubtful Accounts 19,220 Sales for the year were $8,100,000, of which 60% was on credit, and sales returns were $146,000. Cash collections, excluding recoveries, were $5,416,000. Jetson had also written off $62,500, of which half was later recovered and collected. The company's credit and collection manager has estimated that 5% of outstanding accounts receivable are uncollectible. Instructions Calculate the bad debt expense for the year and record the appropriate journal entry. How do your differentiate between IFRS and ASPE in that method? 5 Q4. (25 marks) He:
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ReportAnswer #1
Accounts receivable Allowance for Doubtful Accounts
Beginning Balance $        1,240,250 $                  19,220
Annual credit sales (8100000*60%) $        4,860,000
Sales returns on credit $         (146,000)
Cash collected for the year $      (5,416,000)
Account write off $            (62,500) $                (62,500)
Reinstate accounts (62500/2) $              31,250 $                  31,250
Cash collected from Reinstate accounts $            (31,250)
Unadjusted balance $            475,750 $                (12,030)
Allowance of doubtful account after adjustment (475750*6%) $                  28,545
Less (Add) : Allowance of doubtful account before Adjustment $                (12,030)
Adjustment for Bad debts expense $                  40,575
Date Account titles and explanation Debit Credit
Dec 31 Bad debt expense $              40,575
Allowance for doubtful accounts $                  40,575
To record bad debts expense.

As per IFRS, provision for doubtful accounts (instead of Allowance for doubtful accounts) should be used to record adjusting entry. However, There is no word "provision" covered under the ASPE.

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