The following transactions relate to the business of Kinky Heels n Boots Ltd. Ignore GST.

Required:

(a) Record the above transactions in general journal for Kinky Heels n Boots Ltd.

(b) Calculate the balance in the Allowance for Doubtful Debts account and the Bad Debts Recovered account. Explain where these accounts are presented in the financial statements of Kinky Heels n Boots Ltd.

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June 30 Nov 3 Dec. 10 Based on past experience, it was estimated that 2% of the year's net credit sales revenue of $264 000 will not be collected, and an allowance for doubtful debts was established. After a concerted effort to collect, an account receivable amounting to $2,500 from Tappers Dance Studio was written off as a bad debt. Tappers Dance Studio unexpectedly paid the full amount outstanding from the debt previously written off on the 3rd November.