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Information related to A-TenH Pty Ltd for the year 20x9 is summarised below. Financial year is ended at 30th June. Total credit sales $1,015,000 Sales
Information related to A-TenH Pty Ltd for the year 20x9 is summarised below. Financial year is ended at 30th June. Total credit sales $1,015,000 Sales return and allowance $15,000 Doubtful debts written off $30,000 Opening Balance of Allowance of Doubtful Debt $35,000 Bad debt estimation under ageing of acc. Rec. method $25.000 Balance in the ledger of Acc. Receivable before the estimation of bad debt expense $1,000,000 (Above information may not be applicable to all methods applied) Required: (please label your responses as 1.,2.,3.) Three methods are used to estimate the bad debt expense. Answering the following questions for each method applied below. a) Direct write-off method. b) 3% of net credit sales method, and c) ageing of account receivable method, 1. prepare the journal entry to recognize bad debt expense (6/12) 2. estimate the closing balance of allowance of doubtful debts and (3/12) 3. estimate the carrying amount of account receivable at the end of the year 20X9. (3/12)
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