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What is balance in the allowance for doubtful debts account

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Question - Doubtful debts - net credit sales method - The following transactions relate to the business of Penrith Produce Ltd. Ignore GST. June 30 Based on past experience, it was estimated that 1% of the year's net credit sales revenue of $330 000 will not be collected, and an allowance for doubtful debts was established. Oct. 5 After a concerted effort to collect, an account receivable of $550 from M. McGrath was written off as a bad debt. Nov. 15 M. McGrath unexpectedly paid $242 of the amount of his debt written off on 5 October.

Required -

(a) Record the transactions in general journal form.

(b) What is the balance in the Allowance for Doubtful Debts account and the Bad Debts Recovered account? Where are these accounts shown on the financial statements?

Reference no: EM133188920

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