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Please answer Part A and B for below question and show all workings. Sydney Kitchens Pty Ltd builds and installs kitchens offering credit facilities to
Please answer Part A and B for below question and show all workings.
Sydney Kitchens Pty Ltd builds and installs kitchens offering credit facilities to its customers. The accounting records at 30 June 2020 reveal the following. All amounts shown (except where indicated) include GST. In the past, the company's yearly bad debts expense had been estimated at 2.5% of net credit sales revenue. It was decided to compare the current method with an ageing of the accounts receivable method. The following analysis was obtained with respect to the accounts receivable: Required A. Prepare the journal entries to adjust the Allowance for doubtful debts at 30 June 2020 under: 1. the net credit sales method 2. the ageing of accounts receivable method. (7 marks) B. Determine the balance in the Allowance for doubtful debts account under both methods. (4 marks) A. (2) B. (1)Step by Step Solution
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