3 Doubtful debts GST version On 1 June, Samuels & Co Advisors had balances in the Accounts Receivable and Allowance for Doubtful Debts accounts as set out below. Note transactions are GST Inclusive. 1/6 Balance b/d Accounts Receivable $1,211,210 Allowance for Doubtful Debts 1/6 Balance b/d $15,925 The following transactions occurred during the month of June: 1. Fees earned on credit, $1,716,000. 2. Fees refunded, $35,750. 3. Accounts receivable collected, $2,073,500. 4. Accounts written off as uncollectable, $21,078. Based on an ageing of accounts receivable on 30 June, the firm decided that the Allowance for Doubtful Debts account should have a credit balance of $16,900 on the Statement of Financial Position as at 30 June. Required: a. Prepare general journal entries to record the four transactions above for the month of June and to adjust the Allowance for Doubtful Debts account to the required level. b. Show how accounts receivable and the allowance for doubtful debts would appear on the Statement of Financial Position at 30 June. c. On 29 July, J. Hoskins, whose $2,673 account had been written off as uncollectable back in April, paid their account in full. Prepare general journal entries to record the collection. Table 1 - Account names: Fees Income Bad Debts Expense GST Payable GST Receivable Cash at Bank Allowance for Doubtful Debts Bad Debts Recovered (a) Accounts Receivable (To record Fee Income earned during the month of June) Accounts Receivable (To record fees refunded during June) Accounts Receivable (Cash collected from debtors during June) Accounts Receivable (Account receivable written off as uncollectible at 30 June) (Increase Allowance for Doubtful Debts to $16 900) (b) Samuels & Co Advisors Statement of Financial Position as at 30 June (extract) Accounts receivable Less: Allowance for doubtful debts (note: include minus amount in brackets) *Note includes GST of $72,444 (c) July 29 Accounts Receivable J. Hoskins Allowance for Doubtful Debts/Bad Debts Recovered (Reinstate amount owing by J. Hoskins previously written off as bad) Accounts Receivable (J. Hoskins paid account in full)