Woodhouse Ltd. adopts the Allowance Method relating to Accounts Receivables instead of the Direct Method to write off any bad debts. An extract of Woodhouses statement of financial position is as follows:

Statement of Financial Position (Extract) at 30 June 2021

Current Assets:

Accounts receivable $485,000

Allowance for Doubtful debts ($37,000) $448,000

On 14 July 2021, a balance owing of $22,000 from a customer, Good Loaf Ltd, was determined to be uncollectable.

On 1 October 2021, an electronic bank transfer of $18,000 was received from Good Loaf Ltd. Woodhouse Ltd. issued a receipt for $18,000 as verification that part of the debt written off on 14 July 2022 had now been paid and any balance owing to be considered unrecoverable.

On 30 June 2022, Woodhouse Ltd. prepared the following aged receivable summary:

Details 0-30 Days 31-60 Days 61-90 Days 91+ Days

Receivables amount owing $320,000 $126,400 $70,500 $38,000

Estimated bad debt rate 2% 9% 15% 45%

Estimated Uncollectable $6,400 $11,376 $10,575 $17,100

Required:

Prepare the journal entry to record the event on 14 July 2021. Include a narration. (2 marks)

Prepare the journal entry to record the event on 1 October 2021. Include a narration. (2 marks)

Based on the aged receivable schedule, prepare the journal entry to record the estimated doubtful debt on 30 June 2022. Include a narration. (3 marks)

Prepare a similar extract of the Statement of Financial Position for Woodhouse Ltd. as at 30 June 2022. (1 mark)