The accountant for Debbies Dance Ltd prepared an ageing analysis of accounts receivable balances at 30 June
Question:
The accountant for Debbie’s Dance Ltd prepared an ageing analysis of accounts receivable balances at 30 June 2015 as set out below. The percentages of each age group are based on past experience and are shown next to the aged balances. The company is registered for GST.
The allowance method is used to account for bad debts. On 30 June 2015 the credit balance of the Allowance for Doubtful Debts account is $3150 before any adjustments.
Age | Estimated uncollectable (%) | Balance | |
Current 30–60 days overdue 61–120 days overdue 121 days to 6 months overdue Over 6 months overdue | 0.5 2.0 10 20 40 | $346 500 99 000 24 750 29 700 19 800 | |
$519 750 |
Required
A. Prepare the general journal adjusting entry for estimated bad debts on 30 June 2015.
B. Give the entry to write off the account of S. Riley in August 2015, $1650.
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett