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On 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as below. Ignore GST. During June, the following transactions occurred:
On 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as below. Ignore GST.
During June, the following transactions occurred:
- Revenue earned on credit, $1,195,000.
- Sales returns, $24,100.
- Accounts receivable collected, $1,400,000.
- Accounts written off as uncollectable, $15,851.
Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance for Doubtful Debts account should have a credit balance of $13,500 on the balance sheet as at 30 June. Ignore GST.
Required
- Prepare general journal entries to record the four transactions and to adjust the Allowance for Doubtful Debts account.
- Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet at 30 June.
- On 29 June, Kim Ltd, whose $2,400 account had been written off as uncollectable in June, paid its account in full. Prepare journal entries to record the collection.
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