Solution-Give an adjusting entry to record uncollectible

Give an adjusting entry to record uncollectible expense

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Reference no: EM132957521

Question - Following transactions and account balances are taken from the accounting records of ApexAuto Parts:

Accounts Receivable balance at Jan. 01, 1991 Rs.120,000 and Allowance for Doubtful accounts balance (Cr) Rs.10,500. The transactions for the year ended Dec. 31, 1991 are as under:

(1) Sales on accounts Rs.560,000.

(2) Sales Returns and Allowance on account Rs.20,000.

(3) Sales Discount availed by customers Rs.10,000, and Cash collected from Accounts Receivable amounted to Rs.350,000.

(4) Worthless Accounts Receivable written off Rs.5,000.

(5) Recovered previously written off Accounts Receivable Rs.8,500.

The Co. follows the income statement approach to estimating uncollectible expenses as 1% of net sales.

REQUIRED -

(i) Record the 5 transactions in general journal giving narration.

(ii) Give an adjusting entry to record uncollectible expense at December 31, 1991. Show Computations.

Reference no: EM132957521

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Give an adjusting entry to record uncollectible expense

Reference no: EM132957521

Reference no: EM132957521

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