What would be the net effect of callums decision

Assignment Help Accounting Basics

Reference no: EM133346217

Question: Callum is a sole trader and has an accounting year end of 31 December. In December 2019, Callum wrote off a trade receivable of £8,000 from Jake who did not respond to payment reminders for over six months. In November 2020, Callum hears from Jake who is recovering from a period of ill health. Jake assures Callum that he would settle his debt in 2021.

After his conversation with Jake, Callum decides to reverse the write-off but also make a provision for 40% of Jake's debt. What would be the net effect of Callum's decision on the business's Income Statement for the year ended 31 December 2020?

Reference no: EM133346217

Questions Cloud

Promote a lively and engaging conversation : Promote a lively and engaging conversation about Chapter 20. Feel free to post here with questions and comments about the Chapter

What is total shareholder equity : Abbey Heating Inc. has the following information for the 1,rear 2021 Total Assets: 31.200000 Total Liabilities: 3400.000 What is Total Shareholder Equity?

Explain what an accounting transaction is : Explain what an accounting transaction is, and what its characteristics are. Include examples. include references from where the info came from

What is the lowest score i can get on my assessment : If my assessment is worth 60% of my final grade and my quizzes are worth 40% of my final grade, and I have a 100 for my quizzes, what is the lowest score

What would be the net effect of callums decision : What would be the net effect of Callum's decision on the business's Income Statement for the year ended 31 December 2020?

Does the use of oci with fair value accounting lead : does the use of OCI with Fair value accounting lead to understandability and transparency? Did the US GAAP amendment eliminate a counterintuitive result

What is in this bill and is environmental health addressed : it has been touted as the most significant environmental legislation in the history of this country. What is in this bill? Is environmental health addressed?

Prepare the journal entries to record these transactions : Prepare the journal entries to record these transactions on the books of Chevalier Co. using a periodic inventory system

What internal controls do you encounter on a regular basis : what internal controls do you encounter on a regular basis? Are those controls appreciated or viewed as a nuisance that must be worked around?

User Account

All Pages