Question
The accounts of Polaris Company provided following 20X5 information at 31 December 20X5. Accounts receivable $1,899,000(dr) Allowance for sales discounts $23,500(cr) Allowance for doubtful accounts
The accounts of Polaris Company provided following 20X5 information at 31 December 20X5.
Accounts receivable $1,899,000(dr)
Allowance for sales discounts $23,500(cr)
Allowance for doubtful accounts $134,900(cr)
Total credit revenue during 20X5 $23,589,000
Investigation showed the following.
a. Examination of aging of accounts receivable showed that accounts of $106,200 previously provided for should be written off. Of the remaining balance, $216,000 was doubtful at year end.
b. Estimated sales discounts inherent in the closing accounts receivable balance were $17,200. Terms of 1/10.,n/45 were granted to customers. Accounts receivable were gross, and the discounts taken were recorded when taken by the customers in a discounts account, reported contra to the sales account.
1. Prepare year-end adjusting entries with respect to accounts receivable and the related allowances.
2. Show how the net accounts receivable appear on the statement of financial position on 31 December 20X5.
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