Age of Customer Debt Amounts owed Estimate of % that (including GST) will not be collected. 1-30 days overdue 14,107.50 5% 31 180 days overdue 6,204.00 16 % 181 - 365 days overdue 2,458.50 25 % 1 year + overdue 517.00 100 % 23,287.00 Perfect Cover Insurance Brokers sales data for the past year is Credit Sales and Commissions $42,900 $11,600 $ 2,400 (returns are only available on credit sales) Cash Sales and Commissions Sales Returns Industry data shows that 5% of credit transactions are likely to go bad. Rita has also informed you that the current balance in her allowance for doubtful debts account is 500 Dr after a recent bad debt write off. a) Record Journal entry to adjust the allowance for doubtful debts account using the net sales method. b) State the balance of the allowance for doubtful debts accounts after the adjustment in part A is completed. ABC

Age of Customer Debt Amounts owed Estimate of % that (including GST) will not be collected. 1-30 days overdue 14,107.50 5% 31 180 days overdue 6,204.00 16 % 181 - 365 days overdue 2,458.50 25 % 1 year + overdue 517.00 100 % 23,287.00 Perfect Cover Insurance Brokers sales data for the past year is Credit Sales and Commissions $42,900 $11,600 $ 2,400 (returns are only available on credit sales) Cash Sales and Commissions Sales Returns Industry data shows that 5% of credit transactions are likely to go bad. Rita has also informed you that the current balance in her allowance for doubtful debts account is 500 Dr after a recent bad debt write off. a) Record Journal entry to adjust the allowance for doubtful debts account using the net sales method. b) State the balance of the allowance for doubtful debts accounts after the adjustment in part A is completed. ABC

Name: As part of the review of her business Rita has been looking into what
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Description: As part of the review of her business Rita has been looking into what she is owed byvarious customers and how many debts are outstanding. Rita has been able to gatherthe following information about her customers and credit sales. Rita has reached ou

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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