QUESTION - Pacific Brand Ltd sells portable barbeques on credit. At 31 December (the financial year end), the general ledger of Provision for Bad Debts account showed a $50 debit balance before adjustment. The subsidiary ledger of the accounts receivable before any adjustment indicated the following:
|
Name of customers
|
Invoice date
|
Amount
|
|
Alibaba top
|
1-Feb
|
$1,450
|
|
Hygiene corp
|
12-Mar
|
860
|
|
Isacc Bloom
|
10-Sep
|
640
|
|
|
31-Dec
|
1,420
|
|
Jacob Bro
|
15-Jul
|
2,215
|
|
Kaul Store
|
16-Oct
|
560
|
|
Lawson Grocery
|
16-Jan
|
1,190
|
|
|
7-Apr
|
1,425
|
|
|
8-Nov
|
250
|
|
Others
|
5-Dec
|
12,680
|
|
|
|
$22,690
|
Pacific Brand maintains 30 days credit terms concerning the sale of the goods on credit. In addition, the policy for its uncollectable accounts receivable is based on the following percentage:
|
|
Estimated % uncollectable
|
|
Accounts not due
|
4
|
|
Accounts past due
|
|
|
1-30 days
|
10
|
|
31-60 days
|
30
|
|
61-90 days
|
50
|
|
Over 90 days
|
70
|
Required (ignore GST and narration and show all workings):
(a) Prepare an ageing schedule of accounts receivable at the end of December.
(b) Compute the estimated uncollectable Accounts receivable.
(c) Prepare the journal entry in general journal form to record the provision of the uncollectable accounts receivable.