question 12.11

End of Chapter Problem 12.11 Great Outdoors Ltd sells outdoor furniture settings on credit. The accounting records at 30 June 2019 reveal the following. Ignore GST. Credit sales (for year) Credit sales returns and allowances (for year) Accounts receivable (balance 30 June 2019) Allowance for doubtful debts (credit balance 30 June 2019) $1,220,000 103,000 372,000 1,500 In the past, the company's yearly bad debts expense had been estimated at 2% 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: Balance % estimated uncollectable 1/2 2 Accounts not yet due Accounts overdue: 10-30 days 31-60 days 61-120 days 121 days and over 10 $200,200 69,500 50,200 29,000 23,100 $372,000 25 40 A. Prepare the journal entries to adjust the allowance for doubtful debts at 30 June 2019 under: 1. the net credit sales method 2. the ageing of accounts receivable method. (Enter debit entries first, followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.) Great Outdoors Ltd General journal (extract) Net credit sales method Date Particulars Debit Credit 2019 June 30 (Allowance made on 2% of net credit sales) Great Outdoors Ltd Great Outdoors Ltd General journal (extract) Ageing of accounts receivable method Debit Date Particulars Credit 2019 June 30 (Allowance made on ageing of accounts receivable)