Camping World Ltd sells tents and camping equipment on credit. The accounting records at30 June 2022 reveal the following. Ignore GST.Credit sales (for the year)Credit sales returns and allowances (for the year)Accounts Receivable (at 30 June 2022)Allowance for Doubtful Debts (credit balance at 30 June 2021)In the past, the company's yearly bad debts expense had been estimated at 3% of net creditsales revenue. Management requested the accountant prepare a comparison between the netcredit sales method and an aged analysis of receivables to determine which method may bemore appropriate for use in accounting for bad and doubtful debts. A historical analysis wasperformed and identified the following percentages to calculate potential bad debts:Accounts not yet dueAccounts overdue10-30 days31-60 days61-120 days121 days and overBalance$1 391 000117 000424 4501 950$228 28079 30057 20033 02026 650$424 450% estimateduncollectable1/23123045Required:(a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022under: In the past, the company's yearly bad debts expense had been estimated at 3% of net creditsales revenue. Management requested the accountant prepare a comparison between the netcredit sales method and an aged analysis of receivables to determine which method may bemore appropriate for use in accounting for bad and doubtful debts. A historical analysis wasperformed and identified the following percentages to calculate potential bad debts:Accounts not yet dueAccounts overdue10-30 days31-60 days61-120 days121 days and overBalancethe net credit sales methodthe ageing of accounts receivable method.$228 28079 30057 20033 02026 650$424 450% estimateduncollectable1/23123045Required:(a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022under:i.ii.(b) Determine the closing balance in the Allowance for Doubtful Debts account under bothmethods.(c) Explain how the choice of method will affect the Statement of Financial Position and theStatement of Financial Performance at 30 June 22.

Allowance for doubtful accounts - Allowance for doubtful accounts is the provision made by the…

Camping World Ltd sells tents and camping equipment on credit. The accounting records at 30 June 2022 reveal the following. Ignore GST. Credit sales (for the year) Credit sales returns and allowances (for the year) Accounts Receivable (at 30 June 2022) Allowance for Doubtful Debts (credit balance at 30 June 2021) Accounts not yet due Accounts overdue In the past, the company's yearly bad debts expense had been estimated at 3% of net credit sales revenue. Management requested the accountant prepare a comparison between the net credit sales method and an aged analysis of receivables to determine which method may be more appropriate for use in accounting for bad and doubtful debts. A historical analysis was performed and identified the following percentages to calculate potential bad debts: 10-30 days 31-60 days 61-120 days 121 days and over Balance $1 391 000 117 000 $228 280 79 300 57 200 33 020 26 650 $424 450 424 450 1 950 % estimated uncollectable 1/2 3 12 30 45 Required: (a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022

Camping World Ltd sells tents and camping equipment on credit. The accounting records at 30 June 2022 reveal the following. Ignore GST. Credit sales (for the year) Credit sales returns and allowances (for the year) Accounts Receivable (at 30 June 2022) Allowance for Doubtful Debts (credit balance at 30 June 2021) Accounts not yet due Accounts overdue In the past, the company's yearly bad debts expense had been estimated at 3% of net credit sales revenue. Management requested the accountant prepare a comparison between the net credit sales method and an aged analysis of receivables to determine which method may be more appropriate for use in accounting for bad and doubtful debts. A historical analysis was performed and identified the following percentages to calculate potential bad debts: 10-30 days 31-60 days 61-120 days 121 days and over Balance $1 391 000 117 000 $228 280 79 300 57 200 33 020 26 650 $424 450 424 450 1 950 % estimated uncollectable 1/2 3 12 30 45 Required: (a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022

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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