Question: 102 moomba ltd has a major customer festival ltd to...
10.2 Moomba Ltd has a major customer, Festival Ltd, to whom it has always given a 90 day credit period. For the year ended 30 June 2020, this customer owed the company $180,000 and this was reflected in its draft financial statements. In early August, (prior to being signed off by the directors of Moomba Ltd) the company received notification from the liquidator of Festival Ltd that Moomba Ltd could only hope to recover 65 cents for every $1 owed.
Assume the amount owed is material. In relation to the above event, explain the impact, if any, on the financial statements of Moomba Ltd for the year ended 30 June 2020 to comply with applicable accounting standards. Note the impact, if any, must be shown in dollar amounts