Reference no: EM132697638

Question - Beacon Limited had the following trial balance as at 1 January 2019, as shown in the table below:

Account Debit $ Credit $

Cash 250 000

Accounts receivable 600 000

Inventory 730 000

Prepaid insurance 60 000

Prepaid rent 50 000

Equipment 1 500 000

Allowance for doubtful debts 20 000

Accumulated depreciation 500 000

Accounts payable 700 000

Revenue received in advance 120 000

Income tax payable 530 000

Loan 600 000

Share capital 400 000

Retained profits 320 000

3 190 000 3 190 000

You are given the following additional information for the year ended 31 December 2019:

a) Bad debts of $14,380 were written off.

b) It was decided that allowance for doubtful debts should be 5 per cent of accounts receivable.

Required -

1) Prepare journal entries for these transactions.

2) State the balance of the following accounts via T-ledger for the year ended 31 December 2019:

a) Accounts receivable

b) Allowance for doubtful debts