Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 5 - Cold Store (7 marks) Wally Winter owns Cold Store, a small business that prepares reports annually. Wally has provided you with the
Question 5 - Cold Store (7 marks) Wally Winter owns Cold Store, a small business that prepares reports annually. Wally has provided you with the following Pre- Adjustment Trial Balance extract as at 30 June 2021. Cool Store Pre-Adjustment Trial Balance (extract) as at 30 June 2021. Account Debit Credit Allowance for Doubtful Debts 640 Accounts Receivable 9900 Cash Sales 16 500 Credit Sales 22 000 Accounts Payable 18 300 Sales Returns 3 000 Rent Expense 13 800 Additional information as at 30 June 2021 The debt of $550 (inc. GST) of one of the Accounts Receivable needs to be written off. . Based on historical data, Wally has a policy to report 4% of Net Credit Sales as a doubtful debt for each period. a. Referring to one Accounting Assumption, explain why it is necessary to record balance day adjustments. 3 marks b. Show how the Allowance for Doubtful Debts account would appear in the General Ledger after all adjusting and balancing entries have been posted. 4 marks
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started