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Prepare general journal entry to record the four transaction

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Reference no: EM132525406

Doubtful debts - ageing method

On 1 June, McLean, Roberts and Associates had Accounts Receivable and Allowance for Doubtful Debts accounts as set out below. Ignore GST.

Accounts Receivable                    1/6 Balance 847000

Allowance for Doubtful Debts          1/6 Balance 12250

During June, the following transactions occurred:

1. Fees earned on credit, $1200000

2. Fees refunded, $25000

3. Accounts receivable collected, $1450000

4. Accounts written off as uncollectable, $14740.

Based on an ageing of accounts receivable on 30 June, the firm decided that the Allowance for Doubtful Debts account should have a credit balance of $13000 on the balance sheet as at 30 June.

Required

Question (a) Prepare general journal entries to record the four transactions above and to adjust the Allowance for Doubtful Debts account.

Question (b) Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet at 30 June.

Question (c) On 29 July, Blundell Ltd, whose $1870 account had been written off as uncollectable in June, paid its account in full. Prepare journal entries to record the collection.

Reference no: EM132525406

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