Takataka wonderers Ltd. sold goods on credit at the beginning of the year to Mr. Panda and Mr. Shuka costing Sh.25,000 and Sh.60,000 respectively. At the end of the year and after following all necessary procedures it became evident that the entire amount owed by My Panda will not be recovered in any near future. Of the debt owed by Mr. Shuka Sh.15,000 were bad debts as at 15 December 2018. But by the end of 30 December 2018, Mr. Shuka drew a postdated cheque of Sh.3,000 to clear an invoice included in the bad debt. Gross profit is Sh.50,000

Required:

Ledger entries

Income statement and balance sheet extracts  

 

The trade receivable balances at the period ending 31 December 2017 was Sh.54,260. It has been established that the percentage of the defaulters is 5%. The gross profit Sh.8,520 and bad debts amount to Sh.260

Required:

The ledger entries

Extract of income statement and balance sheet