Complete the accounts receivable control account » Full Grade

Assignment ID: FG133093753

Question – The following transactions relate to the business Fred’s Fruit Supplies Ltd.Transactions are GST inclusive.

01/07/20 Based on past experience, it was estimated that 3% of the previous year’s net credit sales revenue of $341,000 (GST inclusive) will not be collected, and an allowance for doubtful debts was established.

10/10/20 After a concerted effort to collect, an account receivable amounting to $3,465 from Kevin’s Citrus Fruits was written off as bad.

01/12/20 Kevin’s Citrus Fruits unexpectedly paid the full amount outstanding from the debt previously written off on the 10th October.

15/01/21 Received a formal notification that A. Border was insolvent and wrote off the $1,210 owing on his account as uncollectable.

03/03/21 Received 50% of the $4,400 owing by George’s Constructions and wrote off the remainder as a bad debt.

04/04/21 Received $6,600 from Flathead Fish ‘n’ Chippery in full payment of the account which was previously written off as a bad debt.

30/06/21 The Allowance for Doubtful Debts account needs to be adjusted to 3% of the Accounts Receivable Control account balance.

The balance in the Accounts Receivable Control Account at 1 July 2020 is $341,000 (same as the net credit sales for the previous year).

Required –

1. Prepare the general journal entries to record the above transactions. You are not required to complete narrations or posting references. Use the Excel template provided.

2. Complete the Accounts Receivable Control account (running balance format) for the year ended 30 June 2021. You are not required to complete posting references or individual subsidiary ledgers for each debtor. Use the Excel template provided.

3. The management of Fred’s Fruit Supplies Ltd are concerned about the number of debtor accounts that are overdue. Overdue accounts seem to be a regular occurrence. What type of decisions could management make in order to improve the collection times of these accounts?