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blondinia [14]
3 years ago
7

Big and Tall, CPAs, were auditing Mountain Corporation for the year ended December 31, 2019. On January 15, 2020, a major custom

er of Mountain Corporation declared bankruptcy as the result of an uninsured loss due to a major fire in their warehouse on January 10, 2020. As a result, a material accounts receivable from the customer was determined to be uncollectible. Big and Tall, CPAs, would expect the client to:________.
A. Record the loss on uncollectible accounts as a routine transaction in the year 2020.
B. Treat the loss as a subsequent event and adjust the 2019 financial statements to record the loss on uncollectible accounts.
C. Treat the loss as a subsequent event and provide a footnote about the loss in the 2019 financial statements.
D. File a lawsuit against the customer in hopes of collecting some of the money owed to the client.
Business
1 answer:
AURORKA [14]3 years ago
4 0

Answer:

The correct answer is Option B.

Explanation:

Based on IAS 10 Events after the Reporting Period, subsequent events can be an adjusting event or non-adjusting event. If it is an adjusting event, it means an event after the reporting date before the audited financial statements are signed that provides further evidence of conditions that existed at the reporting date. However, non-adjusting events are events after the reporting date that are indicative of a condition that arose after the reporting date, this requires disclosure in the financial statements while for adjusting events, the financial statements are adjusted for condition that arose after the reporting date.

The declaration of the customer as bankrupt is an adjusting event since it affects the receivable collection, hence the need to adjust it as uncollectible,

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Answer:

<u>a. $2,673 over applied</u>

Explanation:

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3 years ago
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finlep [7]

Answer:

A) Overcoming

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Why dont you guys use Question Cove or another service. Why do you like brainly so much?
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2 years ago
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There has been a failure to exclude those individuals who are free-riding from the benefits of goods and services that other people are paying for. A simple example of the free-rider phenomenon is using Wikipedia. Most of those who use it do not contribute or pay for its upkeep in any way yet reap the benefits of its extensive information.

8 0
3 years ago
Three weeks ago, you purchased a July 45 put option on RPJ stock at an option price of $3.20. The market price of RPJ stock thre
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Answer:

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