Ali Coffee Bean assumes that due to Corona, at the end of September 2020 there will be bad debts of $5,000,000 from accounts receivable belonging to Budi's Coffee Shop amounting to $20,000,000. It turned out that on October 21, 2020, Budi's Coffee Shop stated that they were unable to pay their receivables amounting to $1,000,000, so the CEO of Ali Coffee Bean allowed to write-off the receivables. As Ali Coffee Bean's financial staff, make: a. Journal Entry for write-off of Budi's Coffee Shop. b. What was the cash realizable value of Ali Coffee Shop's receivables prior to the write-off of Budi's Coffee Shop receivables in September? c. What is the cash realized value of Ali Coffee Shop's receivables after the write-off of Budi's Coffee Shop receivables?

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 94.1C
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Ali Coffee Bean assumes that due to Corona, at the end of September 2020 there will be bad debts of $5,000,000 from accounts receivable belonging to Budi's Coffee Shop amounting to $20,000,000. It turned out that on October 21, 2020, Budi's Coffee Shop stated that they were unable to pay their receivables amounting to $1,000,000, so the CEO of Ali Coffee Bean allowed to write-off the receivables. As Ali Coffee Bean's financial staff, make:
a. Journal Entry for write-off of Budi's Coffee Shop.
b. What was the cash realizable value of Ali Coffee Shop's receivables prior to the write-off of Budi's Coffee Shop receivables in September?
c. What is the cash realized value of Ali Coffee Shop's receivables after the write-off of Budi's Coffee Shop receivables?

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