What amount of bad debts/impairment loss alpha recognize

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At January 1, 2016 Alpha company had a receivable from bravo company of 400,000 that has been outstanding for quite some time. Initial investigation revealed that bravo is in deep financial dilemma. At present, Bravo is unable to settle all outstanding obligations but further investigation revealed that charlie company is taking over to run and operate the business affairs of Bravo. However, charlie is more than willing to assume only 75% of bravo`s financial obligations and by the end of 2017, all the assumed financial obligations of bravo will be settled. As of December 31, 2016 Alpha company expects to collect 300000 that is due from bravo. As of, December 31 2016 the prevailing rate of interest for a similar financial asset is 14%.

What amount should Alpha report in it`s December 31, 2016 balance sheet involving Accounts Receivable?

What amount of Bad Debts/impairment loss should alpha recognize related to its Accounts Receivable in 2016?

Reference no: EM131814900

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