Question
The Great Outdoors Ltd sells outdoor furniture settings on credit and uses the allowance method to account for bad debts. Great Outdoors is registered for
The Great Outdoors Ltd sells outdoor furniture settings on credit and uses the allowance method to account for bad debts. Great Outdoors is registered for G.S.T. The accounting records at 30 June reveal the following. The balance in the allowance for doubtful debts account at 30 June, before any adjustments is $1,600. An ageing analysis of the accounts receivable balances is set out below. % estimated Balance uncollectable Accounts not yet due $166,100 Accounts overdue: 10-30 days $57,750 2 31-60 days $41,580 10 61-120 days $23,980 25 121 days and over $19,690 40 $309,100 Prepare the general journal entry to record bad debts at 30 June. Show your calculations.
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