Problem
With the purchase of $200 of paint they received one hour of consulting advice from the decorator for free. Normally, the fee for the decorating service is $75 an hour. This deal was very popular with many customers purchasing additional services from the decorator beyond the one hour for free.
Should the company recognize payments to be received for customers who purchased service beyond an hour?
In February 20X6, PI was informed that one of its building contractors went bankrupt and will not be able to pay an outstanding receivable of $80,000. This receivable was not considered in determining their allowance for bad debts for 20X5.
How should this be noted for accounting?