I need help with this question, please help. A and B included thank you BE7.8 Du
ID: 2510242 • Letter: I
Question
I need help with this question, please help. A and B included thank you
BE7.8 During Its first year of operations, Wendy Ltd had credit sales of $3 million, of which $600 ooo remained uncollected at year-end. The credit manager estimates that $40 ooo of these recelvables will become uncollectable a. Prepare the Journal entry to record the estimated uncollectables. (Assume the allowance account has an unadjusted balance of nil.) b. Prepare the current assets section of the statement of financial position for Wendy Ltd, assuming that In addition to the recelvables It has cash of $9o ooo, Inventory of $130 ooo, and prepald expenses of $13 oo0.Explanation / Answer
Date
Particular
Debit
Credit
30-Oct
Bad Debt Exp Dr
$ 40,000.00
Allowance for doubtful debt Cr
$ 40,000.00
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Current asset
Cash
$90,000
Accounts Receivable
$600,000
Less: allowance for doubtful debts
$40000
$560,000
Inventory
$130000
Prepaid Expenses
$13000
Total Current assets
$793,000
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Date
Particular
Debit
Credit
30-Oct
Bad Debt Exp Dr
$ 40,000.00
Allowance for doubtful debt Cr
$ 40,000.00