Transactions affecting Bradford Ltd’s accounts receivable for the year ended 30 June are presented below. On 1 July of the previous year, the opening balance of the Allowance for Doubtful Debts account was a credit of $1960. GST is 10%.

Required

(a) Prepare journal entries for each of the transactions in general journal format.

(b) Prepare the Allowance for Doubtful Debts account showing the balance of the account after the 30 June adjustment.

(c) Assume that, instead of basing the allowance on net credit sales, the allowance is based on an ageing of accounts receivable and that $8921 of the accounts receivable at 30 June were estimated to be uncollectable. Determine the adjustment necessary to bring the allowance account to the desired balance, and prepare the Allowance for Doubtful Debts account.

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Aug. 3 Sept. 6 Oct. 16 Jan. 15 March 9 April 8 June 30 Wrote off the $770 account of Gum Ltd as uncollectable. Received 50% of the $704 balance owed by J. Wiley and wrote off the remainder as a bad debt. Recorded the collection of $528 from G. Rhodes in full payment of her account, which had been written off earlier as a bad debt. Wrote off the accounts of Pauley Ltd, $1210, and R. Donley, $396, as bad debts. Received $550 from E. Darkins in full payment of his account, which had been written off earlier as a bad debt. Received 25% of the $2860 owed by North Ltd and wrote off the remainder as a bad debt. Estimated bad debts expense for the year to be 1% of net credit sales of $503 500 (excluding GST).