Citizen Appliances Company is using income statement approach for creating allowance for doubtful accounts during the...
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Citizen Appliances Company is using income statement approach for creating allowance for doubtful accounts during the period of sales. During 2019-20 the status of Accounts Receivables was as under:- Accounts Receivables Less allowance for doubtful Accounts Net Accounts Receivables Rs. 1,850,000 Rs. 20,000 Rs. 1,830,000 During July, 2020 the accounts receivables amounting to Rs. 8,500 from Azad Company were written off. However, during September 2020, this customer paid Rs. 5,000. During the year 2020-21 credit Sales amounted to Rs. 1,580,000. The company has a policy to create 1% for allowance for doubtful accounts on the basis of credit sales for the year. Up till 30 June 2021 the accounts receivables amounting to Rs. 1,530,000 were also collected from different credit customers. Required 1) 2) 3) 4) Record adjusting accounting entry for writing off the accounts receivables from Azad Company. Record Collection of amount from Azad Company who later paid some dues. Record the creation of additional allowance for doubtful accounts during 2020-21. Present the accounts receivables in the balance sheet as at 30 June, 2021. Citizen Appliances Company is using income statement approach for creating allowance for doubtful accounts during the period of sales. During 2019-20 the status of Accounts Receivables was as under:- Accounts Receivables Less allowance for doubtful Accounts Net Accounts Receivables Rs. 1,850,000 Rs. 20,000 Rs. 1,830,000 During July, 2020 the accounts receivables amounting to Rs. 8,500 from Azad Company were written off. However, during September 2020, this customer paid Rs. 5,000. During the year 2020-21 credit Sales amounted to Rs. 1,580,000. The company has a policy to create 1% for allowance for doubtful accounts on the basis of credit sales for the year. Up till 30 June 2021 the accounts receivables amounting to Rs. 1,530,000 were also collected from different credit customers. Required 1) 2) 3) 4) Record adjusting accounting entry for writing off the accounts receivables from Azad Company. Record Collection of amount from Azad Company who later paid some dues. Record the creation of additional allowance for doubtful accounts during 2020-21. Present the accounts receivables in the balance sheet as at 30 June, 2021.
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