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Topic 8 Tutorial Solution

This document provides solutions to tutorial questions about accounting for receivables. It includes journal entries recording transactions involving accounts receivable, bad debts, and the allowance for doubtful accounts. Calculations are shown for the ending balance of the allowance account and the expected realizable value of accounts receivable.

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Mitchell Bylart
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156 views4 pages

Topic 8 Tutorial Solution

This document provides solutions to tutorial questions about accounting for receivables. It includes journal entries recording transactions involving accounts receivable, bad debts, and the allowance for doubtful accounts. Calculations are shown for the ending balance of the allowance account and the expected realizable value of accounts receivable.

Uploaded by

Mitchell Bylart
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACC10008: Financial Information Systems

Topic 8 – Receivables

Solution to tutorial question

Problem 12.13

A.
July 18 Allowance for Doubtful Debts $520
GST Payable/Collected 52
Accounts Receivable – F. Forrest $572
Wrote off bad debt.

Oct. 19 Accounts Receivable – K. Mears 1,650


Bad Debts Recovered 1,500
GST Payable/Collected 150
Bad debt recovered.

Oct. 19 Cash at Bank 1,650


Accounts Receivable – K. Mears 1,650
Cash received from debtor.

Jan. 31 Cash at Bank (880 x40%) 352


Allowance for Doubtful Debts 480
GST Payable/Collected 48
Accounts Receivable – B. Blanck 880
Amount received, and wrote off remainder as a bad
debt.

alternatively
Cash at Bank (880 x 40%) 352
Accounts Receivable – B. Blanck 352

Allowance for Doubtful Debts 480


GST Payable/Collected 48
Accounts Receivable – B. Blanck (880 x 60%) 528

Feb. 16 Allowance for Doubtful Debts 5,500


GST Payable/Collected 550
Accounts Receivable – Denis Co. Ltd 2,530
Accounts Receivable – H. Howard 3,520
Wrote off bad debts.

alternatively
Allowance for Doubtful Debts 2,300
GST Payable/Collected 230
Accounts Receivable – Denis Co. Ltd 2,530

Allowance for Doubtful Debts 3,200


GST Payable/Collected 320

Page 1 of 4
Accounts Receivable – H. Howard 3,520

Mar. 20 Cash at Bank (1584 x 25%) 396


Allowance for Doubtful Debts 1,080
GST Payable/Collected 108
Accounts Receivable – JB Plumbers 1,584
Amount received and wrote off remainder as a bad
debt.

alternatively
Cash at Bank (1584 x 25%) 396
Accounts Receivable – JB Plumbers 396

Allowance for Doubtful Debts 1,080


GST Payable/Collected 108
Accounts Receivable – JB Plumbers(1584x75%) 1,188

Apr. 16 Accounts Receivable – G. Digby 1,067


Bad Debts Recovered 970
GST Payable/Collected 97
Bad debt recovered.

Apr. 16 Cash at Bank 1,067


Accounts Receivable – G. Digby 1,067
Cash received from debtor.

June 30 Bad Debts Expense 9,465


Allowance for Doubtful Debts 9,465
End-of-period adjustment. (631,000x 1.5%)

Page 2 of 4
B.
1.
Balance in the allowance account after 30 June
adjustment:
Beginning balance $9,300
Less: Debits to the account during the year 7,580
Add: Credits to the account during the year —
End-of-period adjustment 9,465
Ending balance $11,185

OR

Date Account Debit Credit Balance


1 July Balance 9,300 Cr
18 July Acccts Receivable-F. Forest 520 8,780 Cr
31 Jan Accts Receivable-B. Blanck 480 8,300 Cr
16 Feb Accts Receivable-Denis Co Ltd/H. Howard 5,500 2,800 Cr
20 Accts Receivable-JB Plumber 1,080 1,720 Cr
March
30 June Bad Debts expense 9,465 11,185 Cr

2.
Expected realisable value of accounts receivable:
30 June balance of accounts receivable $189,200
Less: Allowance for doubtful debts 11,185
Expected realisable value $178,015

C.
1. Balance at beginning $9,300 Cr
Less total debits 7,580
Plus total credits 0
1,720 Cr
Expected balance at end 11,630 Cr
Adjustment required 9,910End of period adjustment required
9,910 Cr
Desired ending balance 11,630 Cr

alternatively
Date Account Debit Credit Balance
1 July Balance 9,300 Cr
18 July Acccts Receivable-F. Forest 520 8,780 Cr
31 Jan Accts Receivable-B. Blanck 480 8,300 Cr
16 Feb Accts Receivable-Denis Co Ltd/H. Howard 5,500 2,800 Cr
20 Accts Receivable 1,080 1,720 Cr
March
30 June Bad Debts expense 9,910 11,630 Cr

2.
Expected realisable value of accounts receivable:
30 June balance of accounts receivable $189,200
Less: Allowance for doubtful debts 11,630

Page 3 of 4
Expected realisable value $177,570

Page 4 of 4

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