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Question 2.1. Accounts Receivable On 1 July 2019, Meow Limited had an accounts receivable balance of $205,000 and an allowance for doubtful debts balance of

Question 2.1. Accounts Receivable

On 1 July 2019, Meow Limited had an accounts receivable balance of $205,000 and an allowance for doubtful debts balance of $4,100.

During the year ended 30 June 2020, credit sales amounted to $75,500 and cash collected from customers was $81,000.

At the end of the financial year, the credit manager decided that accounts totaling $1,600 should be written off as bad debts.

An aging analysis shows that the ending balance of allowance for doubtful debts should be $6,200.

Prepare all the related journal entries including:

Credit sales (1 mark)

Collection of cash (1 mark)

Write-off of bad debt (2 mark) and

Recognizing the bad debt expense (3 mark).

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