(a) On 1 July 2022, WeCafe Pty Ltd had a debit balance $78,200 in accounts receivable...

   

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(a) On 1 July 2022, WeCafe Pty Ltd had a debit balance $78,200 in accounts receivable and a credit balance $16,800 in the allowance for doubtful debts. On 3 July, WeCafe was notified by Fantastic Holiday Pty Ltd that the business had been declared bankrupt and will not be able to pay back $5,060 owed to WeCafe from a credit sale in June 2022. On 25 July 2022, WeCafe was notified by another debtor, FirstLeisure Pty Ltd, that $1,540 (GST Inclusive) that had been written off as uncollectible in May 2022 would be paid in full in August 2022. At the end of year on 31 July 2022, the managers reassessed the allowance for doubtful debts and decided on a closing balance of $16,320 (GST Exclusive) under the ageing of receivables approach. (c) WeCafe sells three types of coffee inventory. All inventory is currently valued using historical cost. The cost and net realisable values (NRV) at 31 July 2022 for each product are shown below: C1 B1 A1 Cost per unit excluding GST $980 $1,097 $1,232 NRV per unit excluding GST $965 $1,120 $1,189 Quantity 25 40 20 Required: Prepare the journal entry to account for necessary adjustments to the inventory valuation at 31 July 2022 for WeCafe Pty Ltd. Narrations are not required. Show your workings. Date Account Dr ($) Cr ($) (a) On 1 July 2022, WeCafe Pty Ltd had a debit balance $78,200 in accounts receivable and a credit balance $16,800 in the allowance for doubtful debts. On 3 July, WeCafe was notified by Fantastic Holiday Pty Ltd that the business had been declared bankrupt and will not be able to pay back $5,060 owed to WeCafe from a credit sale in June 2022. On 25 July 2022, WeCafe was notified by another debtor, FirstLeisure Pty Ltd, that $1,540 (GST Inclusive) that had been written off as uncollectible in May 2022 would be paid in full in August 2022. At the end of year on 31 July 2022, the managers reassessed the allowance for doubtful debts and decided on a closing balance of $16,320 (GST Exclusive) under the ageing of receivables approach. (c) WeCafe sells three types of coffee inventory. All inventory is currently valued using historical cost. The cost and net realisable values (NRV) at 31 July 2022 for each product are shown below: C1 B1 A1 Cost per unit excluding GST $980 $1,097 $1,232 NRV per unit excluding GST $965 $1,120 $1,189 Quantity 25 40 20 Required: Prepare the journal entry to account for necessary adjustments to the inventory valuation at 31 July 2022 for WeCafe Pty Ltd. Narrations are not required. Show your workings. Date Account Dr ($) Cr ($)