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The following information is taken from the accounting records of Sayan Company on March 31, 2017: Trade Receivables: Rs 4,074,000 (Debit Balance) Allowances for Credit
- The following information is taken from the accounting records of Sayan Company on March 31, 2017:
Trade Receivables: Rs 4,074,000 (Debit Balance) Allowances for Credit Losses: Rs 65,660 (Credit Balance)
The ageing analysis of the Trade Receivables at March 31 along with Lifetime Expected Credit Loss Rate (%) are given below:
Age Category | Amount (Rs) | Credit Loss Rate (%) |
Not yet due | 1,927,800 | 3 |
1-30 days past due | 776,300 | 6 |
31-60 days past due | 612,500 | 10 |
61-90 days past due | 455,700 | 15 |
91-120 days past due | 194,600 | 25 |
Over 120 days past due | 107,100 | 50 |
Total | 4,074,000 |
|
- Calculate the amount of allowance for credit losses at March 31, 2017.
- Prepare the general journal entry to record the bad debt expense for the year.
- Post the journal entry to the Allowance for Credit Loss account.
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