Problem 12.13 Doubtful debts net credit sales and ageing methods All transactions below relate to Blanco Enterprises Ltds uncollectable accounts for the financial year ended 30 June 2022. Ignore GST 1. July 15 Wrote off as bad the accounts for Jamesin Co Ltd, $3,290 and F.Belows $4,575. 2. Aug 25 Re-established the account of R.Simons and recorded the collection of $2,145 in full payment of his account which was previously written off as a bad debt. 3. Nov 3 Received from EZY Electrical, 60% of the $2,059 owing. The balance remaining was written off as a bad debt. 4.Jan 10 Received formal notification from F.Bewler he was insolvent and wrote off the $745 amount owing as uncollectible. 5. Apr 28 Received $1,390 from Shark Constructions in full payment of his account, which had been written off earlier as uncollectable. 6. May 10 Received 75% of the $1,145 balance owned by J.Saull and wrote off the remainder as a bad debt. 7. June 30 Estimated bad debts expense for the year to be 2% of net credit sales of $820,000.

The Accounts Receivable account, prior to the transactions listed above, had a balance at 30 June 2022 of $245,960. The opening balance of the Allowance for Doubtful Debts on 1 July 2021 amounted to $12,300 credit. Required: (a) Prepare journal entries for each of the transactions listed above. (b) Determine: i. the balance in the Allowance for Doubtful Debts account after the 30 June adjustment Balance c/d ii. the expected realisable value of the accounts receivable as at 30 June. (c) Assume that instead of basing the allowance for doubtful debts on net credit sales, the estimate of uncollectable accounts is based on an ageing of accounts receivable and that $15,120 of the accounts receivable as at 30 June was estimated to be uncollectable. Here we would assume this to be Balance c/d. Determine: i. the general journal entry to bring the allowance account to the desired balance ii. the expected realisable value of the accounts receivable as at 30 June.

Problem 12.13 - Doubtful debts net credit sales and ageing methods GST version All transactions below relate to Blanco Enterprises Ltds uncollectable accounts for the financial year ended 30 June 2022. Transactions are GST Inclusive. 1. July 15 Wrote off as bad the accounts for Jamesin Co Ltd, $3,619 and F.Belows $5,033. 2. Aug 25 Re-established the account of R.Simons and recorded the collection of $2,360 in full payment of his account which was previously written off as a bad debt. 3. Nov 3 Received from EZY Electrical, 60% of the $2,265 owing. The balance remaining was written off as a bad debt. 4. Jan 10 Received formal notification from F.Bewler he was insolvent and wrote off the $820 amount owing as uncollectible. 5. Apr 28 Received $1,529 from Shark Constructions in full payment of his account, which had been written off earlier as uncollectable. 6. May 10 Received 75% of the $1,260 balance owned by J.Saull and wrote off the remainder as a bad debt. 7. June 30 Estimated bad debts expense for the year to be 2% of net credit sales of $902,000.

The Accounts Receivable account, prior to the transactions listed above, had a balance at 30 June 2022 of $270,556. The opening balance of the Allowance for Doubtful Debts on 1 July 2021 amounted to $12,300 credit. Required: (a) Prepare journal entries for each of the transactions listed above. (b) Determine: i. the balance in the Allowance for Doubtful Debts account after the 30 June adjustment ii. the expected realisable value of the accounts receivable as at 30 June. (c) Assume that instead of basing the allowance for doubtful debts on net credit sales, the estimate of uncollectable accounts is based on an ageing of accounts receivable and that $15,120 of the accounts receivable as at 30 June was estimated to be uncollectable. Determine: i. the general journal entry to bring the allowance account to the desired balance ii. the expected realisable value of the accounts receivable as at 30 June