Mekka Hypermarket on January 1st, 2020, sold rice product on account to Al Karama shop for RO 3,000. The sales term is 3% on 45 days. On January 31, Al Karama shop informed Mekka that they have financial issue

Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter10: Liabilities: Current, Installment Notes, And Contingencies
Section: Chapter Questions
Problem 10.1EX: Current liabilities Bon Nebo Co. sold 25,000 annual subscriptions of Bjorn for 85 during December...
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Mekka Hypermarket on January 1st,
2020, sold rice product on account to
Al Karama shop for RO 3,000. The
sales term is 3% on 45 days. On
January 31, Al Karama shop informed
Mekka that they have financial issue
and cannot pay 50% of the amount,
so Mekka assume that 50% of the
amount is uncollectable. However,
Mekka wrote off 500 of the
uncollectable account on 2nd of
February due to AL Karama shop
bankruptcy. Prepare the journal entry
to record the transaction happened
February 2nd on the books of Mekka
Hypermarket:
Select one:
a.
Allowances for Doubtful
Account
500
Account
Receivable
500
b.
Transcribed Image Text:4:52 ul 4G 0 Not Secure – moodle.asu.edu.om 50 11 Question 10 Answer saved Marked out of 2.00 P Flag question Mekka Hypermarket on January 1st, 2020, sold rice product on account to Al Karama shop for RO 3,000. The sales term is 3% on 45 days. On January 31, Al Karama shop informed Mekka that they have financial issue and cannot pay 50% of the amount, so Mekka assume that 50% of the amount is uncollectable. However, Mekka wrote off 500 of the uncollectable account on 2nd of February due to AL Karama shop bankruptcy. Prepare the journal entry to record the transaction happened February 2nd on the books of Mekka Hypermarket: Select one: a. Allowances for Doubtful Account 500 Account Receivable 500 b.
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