Ab Co have total receivables at the end of its accounting period of $45,000. Included in this total is an amount of $790 owed by J Singh who has been declared bankrupt and $1,240 due from P Chan who has disappeared.
Required:
Write up the receivables general ledger and irrecoverable debts expense account to reflect the writing-off of these two irrecoverable debts.
Ling prepares financial statements to 31 December each year. At 31 December 20X7 there were receivables of $3,655 and there was also a debt written off from L Moss of $699. During the year to 31 December 20X8 Ling made credit sales of $17,832 and received receipts from credit customers totalling $16,936. During 20X8, Ling also received the $699 from L Moss that had been written off in 20X7.
Required:
Write up these transactions in Ling's general ledger accounts for 20X7 and 20X8.
Hinata is preparing annual financial statements for the year ended 30 June 20X9. The balance on the trade receivables general ledger account is $78,635. Included in this figure are $2,385 of customers whose debts are now deemed to be irrecoverable. Hinata has already written off $2,634 of debts during the year. In addition, Hinata wishes to create an allowance for receivables for $3,250 owed by certain customers known to be in financial difficulties. The opening allowance for receivables in July 20X8 was $4,300.
Required:
(a) Adjust the trade receivables general ledger account in respect of the irrecoverable debts.
(b) Calculate the change in the allowance for receivables required and prepare the general ledger account for the allowance for receivables.
(c) Prepare the irrecoverable debts expense account.