Question 2 (A) ( 7 5marks) Summer Co Ltd has accounts receivable of $100,350 at 30 June Credit terms are 2 10, n 30 At this date, Allowance for Doubtful Accounts has a credit balance of $1,234 prior to adjustment The company uses the percentage of receivables basis for estimating uncollectible accounts The Companys estimate of bad debts is shown below Age of Accounts Balance, April 30 Estimated Percentage Uncollectible 1 30 days $68,000 2 00 31 60 days 22,300 5 00 61 90 days 5,500 20 00 Over 90 days 4,550 50 00 Required Determine the total estimated uncollectible at 30 June (2 5mark) Calculate the adjusted bad debt expense for the period (2 5 marks) Prepare the journal entries to account for bad debt expense for the period (2 5 marks) Work out the cash net realisable value of Account receivable at 30 June (1 mark) Question 2 (B) (7 5 marks) SKP Co Ltd has accounts receivable of $102,870 at April 30 Credit terms are 2 10, n 30 At April 30, Allowance for Doubtful Accounts has a credit balance of $510 prior to adjustment The company uses the percentage of receivables basis for estimating uncollectible accounts The Companys estimate of bad debts is shown below Age of Accounts Balance, April 30 Estimated Percentage Uncollectible 1 30 days $65,790 3 00 31 60 days 28,640 6 00 61 90 days 6,200 18 00 Over 90 days 2,240 45 00 Total $102,870 Required Determine the total estimated uncollectible at April 30 (1 5 mark) Calculate the adjusted bad debt expense for the period (1 5 marks) Prepare the journal entries to account for bad debt expense for the period (3 marks) Work out the cash net realisable value of Account receivable as at April 30 (1 5 mark)

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Question: Question 2 (A) ( 7.5marks) Summer Co. Ltd has accounts receivable of $100,350 at 30 June. Credit terms are 2/10, n/30. At this date, Allowance

Question 2 (A) ( 7.5marks)

Summer Co. Ltd has accounts receivable of $100,350 at 30 June. Credit terms are 2/10, n/30. At this date, Allowance for Doubtful Accounts has a credit balance of $1,234 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The Companys estimate of bad debts is shown below.

Age of Accounts	Balance, April 30	Estimated Percentage Uncollectible
1-30 days	$68,000	2.00%
31-60 days	22,300	5.00%
61-90 days	5,500	20.00%
Over 90 days	4,550	50.00%

Required:

Determine the total estimated uncollectible at 30 June. (2.5mark)
Calculate the adjusted bad debt expense for the period. (2.5 marks)
Prepare the journal entries to account for bad debt expense for the period. (2.5 marks)
Work out the cash/net realisable value of Account receivable at 30 June. (1 mark)

Question 2 (B) (7.5 marks)

SKP Co. Ltd has accounts receivable of $102,870 at April 30. Credit terms are 2/10, n/30. At April 30, Allowance for Doubtful Accounts has a credit balance of $510 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The Companys estimate of bad debts is shown below.

Age of Accounts	Balance, April 30	Estimated Percentage Uncollectible
1-30 days	$65,790	3.00%
31-60 days	28,640	6.00%
61-90 days	6,200	18.00%
Over 90 days	2,240	45.00%
Total	$102,870

Required:

Determine the total estimated uncollectible at April 30. (1.5 mark)
Calculate the adjusted bad debt expense for the period. (1.5 marks)
Prepare the journal entries to account for bad debt expense for the period. (3 marks)
Work out the cash/net realisable value of Account receivable as at April 30. (1.5 mark)

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