Question: QUESTION 5 (7 MARKS) Advanced Research Pty Ltd opened a nation wide Management Consultants business back in 2007. They use the Net Credit Sales method

QUESTION 5

(7 MARKS)

Advanced Research Pty Ltd opened a nation wide Management Consultants business back in 2007. They use the Net Credit Sales method for estimating Doubtful Debts and it appears that 3% of Credit Sales will not be collected this year. There was a balance in the Allowance for Doubtful Debts ledger account on 1 July, 2021 of $464 670.

On 29 October, 2021 a customer B. Plunger who owed Advanced Research Pty Ltd $49 150 officially went Bankrupt and was written off as a Bad Debt. On the 10 March, 2022 his fixed assets were sold and B. Plunger only managed to pay back $29 670 of the total debt he originally owed to the firm.

On 30 June, 2022 an entry was required for the estimated Allowance for Doubtful Debts. Total Sales for the business for the next financial year that ends on the 30 June, 2023 are expected to be $15 480 000 of which 92% will be Credit Sales.

Required:

[Use 4 Columns - Date / Account / Debit / Credit, to prepare General Journal entries, to record the above information.] (Narrations are notrequired).

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