The following balances have been taken from the books of ABC Company on December 31, 2020. [08 Marks]
1) Total sales on credit during the year is 360,000
2) Sales return on credit 80,000
3) An amount was granted as sales discount 25,000
4) Cash collection during the year from customers whom credit sales were made 90,000
Allowance for bad debts account is maintained at 15% of accounts receivable balance at the end of the period.
Required:
• Pass journal entries to record the above transactions and prepare account receivable ledger account.
• Calculate bad debts expense and give adjusting entry. Also prepare allowance for bad debts ledger account.
• Prepare partial balance sheet as on December 31, 2020.

Answer rating: 100% (QA)

To solve this problem we need to create the following accounts and record the transactions Sales on ... View the full answer