While accounting for accounts receivable for Easy DVD Ltd, the following information became available to the accountant.
Question:
While accounting for accounts receivable for Easy DVD Ltd, the following information became available to the accountant. At 1 July 2014, the Allowance for Doubtful Debts account balance was $8100. To 30 June 2015, debts amounting to $16 560 were written off as bad, and at 30 June 2015, the required allowance for doubtful debts was calculated under the ageing method to be $9450. To 30 June 2016, debts amounting to $12 690 were written off and at 30 June 2016 the allowance for doubtful debts was calculated under the ageing method to be $10 845. Ignore GST.
Required
A. Prepare and balance the Allowance for Doubtful Debts account and the Bad Debts Expense account for years ending 30 June 2015 and 30 June 2016.
B. Prepare the necessary general journal entries to bring the allowance for doubtful debts to the appropriate amount at 30 June 2015 and 30 June 2016.
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
A B 2015 June 30 Bad Debts Expense 17 910 Allowance for Doubtful Debts 1...View the full answer
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
