The following information was obtained from the financial records of Premier Services on 30 June 2023:

                                                                                          Accounts receivable   $611-000

                                                                                          Allowance for doubtful debts   39.000

                                                                                           Debts to be written off before 30 June    11 830

After performing an ageing analysis of receivables, the firm has requested the allowance for doubtful debts be amended to 8% of Accounts Receivable outstanding at 30 June 2023. Ignore GST.

Required
a. Prepare the appropriate general journal entry/ies to record the bad debts write off at 30 June (narrations are required).
b. Prepare the journal entry necessary to adjust the Allowance for Doubtful Debts account after writing off the bad debts in (a) (narrations are required). 

c. Post the journal entries from (a) and (b) to the Allowance for Doubtful Debts ledger account and calculate the final balance at 30 June 2023.
d. Identify the amount(s) to be charged as bad debts expense for the year.
e. Why bad debts expensed even before the bad debts actually happen?











 

Answer rating: 100% (QA)

Here are the journal entries ledger postings and calculations required to record the bad debts write ... View the full answer