The event should be presented in the financial statements as follows:
1. The assets side of the balance sheet will be reduced by 75%, with its accompanying accumulated depreciation.
2. The bonded liability on the balance sheet is eliminated by the relevant amount.
3. The journal entry should debit the Bonded Liability and accumulated depreciation, while the assets worth 75% are credited.
4. If the bonded indebtedness is more than 75% of the assets, the company records a profit on disposal on the income statement. Otherwise, it records a loss. If they are equal, there is no profit or loss.
Thus, the difference between the debit and credit entries constitutes either profit or loss on disposal.
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Answer:
$1,700,000
Explanation:
The computation of the NET accounts receivable (the cash realizable value) at December 31, 2019 is shown below:
= Account receivable - allowance for doubtful debts
= $2,000,000 - $300,000
= $1,700,000
By deducting the allowance for doubtful debts from the account receivable we can get the net account receivable or the cash realizable value
Therefore we ignored the bad debt expense
Answer:
The answer is D. Accounted for in current and future periods.
Explanation:
A change in accounting estimate is an adjustment of the carrying value of an asset or liability arising from reassessing the expected future economic benefits and obligations associated with that asset or liability.
Changes in accounting estimates must be shown in the accounting period in which the estimates are revised and periods after i.e accounted for prospectively. Example is a change in useful life and salvage value of a fixed asset
Answer: The problem in outsourcing from low-cost country:
It is seeking goods and services beyond the border of a region. It is a process where organizations look for the most cost-effective place globally to manufacture their goods. Most organizations choose a global sourcing strategy as the cost is using lower abroad.
Explanation:
Outsourcing from low-cost countries a move by the company to cut costs as they have a huge presence of labor. It will allow them to concentrate on their core activities. But, there are some problems outsourcing from low-cost countries. Some are :
1. Sometimes the outsourcing does not provide the expected cost savings.
There might be new conflict and problem arising from different sources
2. There might be legal barriers present between the two different nations involved in outsourcing.
