Question
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).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started