Question
1.1 Record the transactions in general journal form. 1.2 What is the balance in the Allowance for Doubtful Debts accounts and the Bad Debts account?
1.1 Record the transactions in general journal form.
1.2 What is the balance in the Allowance for Doubtful Debts accounts and the Bad Debts account? Where are these accounts shown on the financial statements?
The following transactions relate to the business of Penrith Produce Ltd. Ignore GST.
June 30
| Based on experience, it was estimated that 1% of the years net credit sales revenue of $495 000 will not be collected, and an allowance for doubtful debts was established. |
Oct. 5
| After a concerted effort to collect, an account receivable of $825 from M. McGrath was written off as a bad debt. |
Nov. 15 | M. McGrath unexpectedly paid $363 of the amount of his debt written off on 5 October. |
1.1 Journal entries
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1.2 Disclose in the financial statements
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