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Question 3 (9 marks): On 1 January 2021, Sandy Limited reported the following information on its balance sheet: Accounts Receivable Allowance for Doubtful Accounts $220,000
Question 3 (9 marks): On 1 January 2021, Sandy Limited reported the following information on its balance sheet: Accounts Receivable Allowance for Doubtful Accounts $220,000 (5.600) During 2021, the business journalised the following transactions related to receivables: Sales on account (terms 2/10 net 35) Sales returns and allowances Sales discounts $2,000,000 40,000 30,000 2,100,000 6,000 2,000 Cash received from customers Write-offs of accounts receivable deemed uncollectible Cash received from recovered write-offs (a) REQUIRED: Ignore GST for this problem. Using the T account format, enter the beginning balance for Accounts Receivable, post above events, and calculate the 2021 ending balance. Cross-referencing is not required. (4 marks) (b) Prepare the required adjusting journal entry on 31 December 2021, assuming that the recoverable amount of accounts receivable is estimated to be $40,000. (2 marks) (c) Calculate the average collection period for accounts receivable, i.e., days in accounts receivable, for 2021. Comment on your result
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