question archive The following balances appeared in the ledger of Lo Gloss and Co on 31st May, 2015
The following balances appeared in the ledger of Lo Gloss and Co on 31st May, 2015
Subject:ManagementPrice: Bought3
The following balances appeared in the ledger of Lo Gloss and Co on 31st May, 2015.Accounts Receivable Dr 354,360Bad and Doubtful Debts Dr 16,840Allowance for Doubtful Debts Cr 12,310Sales Cr 2,648,420The transactions for June were:(i) Sales cash $123570 credit $98000(ii) Cash collected from customers $114630(iii) A cheque for $300 (not included in (ii)) was received from a debtor whose debt of $800 had been previously written off.(iv) Investigation of a credit balance in a debtors account showed that a credit sale of $500 for goods had not been recorded.(v) Doubtful Debts are normally provided for each month at the rate of 2 per cent of credit sales. After an analysis of accounts receivable balances on 30th June (after the transactions for June had been recorded) below, it was decided to write off all debts more than 12 months overdue and to adjust allowance for doubtful debts to agree with the uncollectable estimate given by the accounts receivable age analysis:Age of Account Accounts Receivable Uncollectable Estimate0-1 month 95000 0.8%1-6 months 188500 4.0%7-12 months 48400 10.0%More than 12 months 5650 80.0%Required:Record the above information in appropriate ledger accounts including balances at beginning. Create extra accounts as necessary (either T or three column)
