QUESTION 3

Gabriel s Party Supplies uses the net credit sales method to estimate doubtful debts. Gabriel s Party Supplies is registered for GST. The balance in the Allowance for Doubtful Debts account on 1 July 2018 was $8,250.

The following transactions relate to Gabriel s Party Supplies for the year ending 30 June 2019.

10 July 2018

18 September

12 January

22 February 30June, 2019

Required:

Wrote off as uncollectable the amount of $649 owing on the account of M. Williams.

Re-established the account of J. Adams and recorded the collection of $1,980 in full payment of his account, which had been written off previously.

Received 60% of the $1,100 balance owed by M. Jordon and wrote off the remainder as uncollectable.

Wrote off the accounts of Biggs Ltd of $1,078.

Based on the past history Gabriel s Party Supplies estimates that it will not be able to collect 2% of its accounts receivable balance. Dalton Ltd. has an accounts receivable balance of $770,000 at 30 June 2019.

a. Prepare the general journal entries for each of the above transactions. Narrations are not required.