PRC-1 · Chapter 5 · Question 46 of 100
A company has opening receivables of Rs. 500,000. Sales are Rs. 1,000,000. Cash collected is Rs. 900,000. A debt of Rs. 20,000 is written off. What is the closing Net Receivables if a 5% allowance is maintained?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 551,000
Explanation
Gross Closing Receivables = 500,000 + 1,000,000 - 900,000 - 20,000 = Rs. 580,000. Allowance = 5% x 580,000 = 29,000. Net Receivables = 580,000 - 29,000 = Rs. 551,000.
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