The accountant for Metro Motorcycles Ltd prepared an aged analysis of accounts receivable balances at 30 June

Question:

The accountant for Metro Motorcycles Ltd prepared an aged analysis of accounts receivable balances at 30 June 2023. The percentages of each age group are based on historical analysis and are presented in the table below. Ignore GST.

It is company policy to use the allowance method to account for bad debts. On 30 June 2023, the balance in the Allowance for Doubtful Debts prior to any adjustments totalled $4095 credit.

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Required:

(a) Prepare the journal entry to adjust for the estimated bad debts at 30 June 2023.

(b) Prepare the journal entry on 1 August, to write off $2145 owing by Specialist Parts and Accessories Ltd.

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Accounting

ISBN: 9780730382737

11th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie

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