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QUESTION 4 (10 marks) The March 31, 2020 balance sheet of Kalakaua Corporation had Accounts Receivable of $1,181,250 and a credit balance in Allowance for
QUESTION 4 (10 marks) The March 31, 2020 balance sheet of Kalakaua Corporation had Accounts Receivable of $1,181,250 and a credit balance in Allowance for Doubtful Accounts of $74,250. During the year ended March 31, 2021, the following transactions occurred: sales on account $3,487,000; sales returns & allowances, $270,000; collections from customers, $3,037,500; accounts written off $92,250; previously written off accounts of $11,250 were collected. REQUIRED: a) Using the above information, what is the balance of Accounts Receivable at March 31, 2021? (2 marks)- Answer:$ b) Assume that it is company policy to use the aging of receivables basis to estimate bad debt expense. It determines that uncollectible accounts are expected to be $81,250. What is the adjusting entry at March 31, 2021? Assume the March 31, 2021 balance of Accounts Receivable is $1,181,250 and Allowance for Doubtful Accounts has an existing balance of $7,400 (dr) (Show calculations)_4 marks) Date Account Titles and Explanations- Debit Credit c) Ignore the entry made in b) above. Suppose that it is the company policy to use the percentage of sales basis to estimate bad debts expense and anticipates 2.75% of net sales to be uncollectible, what is the adjusting entry at March 31, 2021? (Show calculations.) (4 marks) Date Account Titles and Explanations Debite Credit
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