Q.1. Journalize the following transactions:

i) Based on previous years experience, management of Red Company decided to spare an allowance (impairment) of 10% of accounts receivable for risky (uncollectible) accounts. (Total Account Receivable was TL 500.000).

ii) Customer X informed that he will not be able to pay his debt and Red Company wrote off the whole amount of its receivable from Customer X which was TL 10.000.

iii) Customer X agreed to pay his debt totaling TL 10.000. He paid TL 7.500 and the remaining will be paid in 10 days.

Required: For Red Company;

1. Journalize the transactions in i); ii) and iii).

2. What is net realizable value of the Account Receivable of RedCompany?