Question
Selected information on ABC Companys accounts receivable is available: - Accounts receivable had an opening balance on 1 July 2021 of $68,000. - Allowance for
Selected information on ABC Companys accounts receivable is available:
- Accounts receivable had an opening balance on 1 July 2021 of $68,000.
- Allowance for doubtful debts had an opening balance on 1 July 2021 of $4,700.
- During 2021/22, credit sales were $713,600 (including GST) of which $584,700 has already been collected from customers and $3,266 were written off.
- On 30 June 2022, an aging of accounts receivable analysis shows that $5,300 (excluding GST) will probably not be collected.
What is the adjusting entry for the bad debts expense?
a. DR Allowance for doubtful debts $3,440; and CR Accounts receivable $3,440 b. DR Bad debts expense $3,880; and CR Accounts receivable $3,880 c. DR Bad debts expense $3,880; and CR Allowance for doubtful debts $3,880 d. DR Bad debts expense $3,440; and CR Allowance for doubtful debts $3,440
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