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Prepare necessary properly formatted general journal entery

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Reference no: EM132546268

The following information relates to the business of Stonebridge Pty Ltd for the year ending 30 June 2019. The company had a closing balance of $9,000 credit in its allowance for doubtful debts account and $54,000 debit balance in accounts receivable.

  • On 10th July 2019, the business provided services on credit to Rain Passion Pty Ltd, of $11,000 (GST inclusive).
  • Unfortunately Rain Passion Pty Ltd notified Stonebridge on 31st July 2019 that they had declared bankruptcy and as a result could not pay their bill.
  • The business received on 7th August 30% of $22,000 owed by Essence Pty Ltd from sales in a previous period.
  • Rain Passion Pty Ltd contacted Stonebridge on 5th September 2019 to confirm they had paid $2,200 that was previously thought to be uncollectable.
  • On 30th September 2019, Management informs you that they have reassessed the allowance for doubtful debts and have decided on a closing balance at the end of September of $15,000 (GST exclusive) under the ageing of receivables approach.

REQUIRED:

Question 1: Prepare the necessary properly formatted general journal entries to record the transactions as shown above. You should allow for GST where applicable when completing your journal entries.

Reference no: EM132546268

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