Roxy Company has the following accounts balances before year end adjustment at the end of its accounting period:
Account Title Amount (in tk) Dr Cr Accounts Receivable Tk 6,00,000
Credit Sales Tk 5,50,000 Sales Returns and Allowance Tk 50,000
Allowance for doubtful debt Tk 30,000 Other information:
1. Tk 40,000 amount of account receivable would not be collected.
2. One of the credit customers returned goods amounting to tk 20,000 which is not yet recorded.
3. Company's policy is to keep allowance a. @ 10% of accounts receivable.
b. @ 15% of credit sales.
Required: Record the above adjusting entries under these two methods and also determine the amount of accounts receivable to be shown in the balance sheet.
