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Guinevere Company has the following data extracted from its Accounts Receivable records at June 30, 2011 - Guinevere's sales terms are 1/15n/30 and it records
Guinevere Company has the following data extracted from its Accounts Receivable records at June 30, 2011 - Guinevere's sales terms are 1/15n/30 and it records sales at the gross amount of the invoice. - Guinevere's year end is June 30 - The unadjusted balance in the Allowance for Doubtful Accounts at June 30 is $8,000dr. - Guinevere makes average sales of $2,000,000 per year and averages write offs of uncollectible balances of $100,000 per year. - Sales for the year ended June 30,2010 are $1,400,000 credit sales and $400,000 cash sales - Guinevere has a very conservative receivables management strategy. - No adjusting entries have been recorded at June 30 rying to restore its credit rating with all its former suppliers. Please accept this cheque with our apologies". Guinevere should: Multiple Choice Make a debit to Cash and credit Miscellaneous Income Make a debit to Cash and a credit to "Advances from Customers" Some other entry Make a debit to Cash and a credit to Accounts Receivable (after first reversing the write-off entry) Make a debit to Cash and credit Uncollectible Accounts Expense
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