Sorrento Interior Furnishings Pty Ltd has adopted the Allowance for Doubtful Debts Method. The Allowance...
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Sorrento Interior Furnishings Pty Ltd has adopted the Allowance for Doubtful Debts Method. The Allowance for Doubtful Debts as at 1 July 2019 was $7,500 credit (CR). The write-off of bad debts for the 2019 2020 financial year was $8,000. The Allowance for Doubtful Debts as at 30 June 2020 was 7% of credit sales. Credit sales for the 2019 2020 financial year was $130,000 (Disregard GST) What is the adjusting entry to raise the Allowance for Doubtful Debts at 30 June 2020? Group of answer choices
DR: Bad Debts $9,100 CR: Allowance for Doubtful Debts $9,100
DR: Bad Debts $9,600 CR: Allowance for Doubtful Debts $9,600
DR: Bad debts $8,000 & CR: Allowance for Doubtful Debts $8,000
Q2
On 1 June 2023, Goodwin Limited acquired the business of Monty Inc. for $280 000. The carrying amount of Monty Inc's net assets at the time of the acquisition was $215 000 while independent valuers calculated their fair value at $250 000. Goodwin Limited should debit 'Goodwill' for the amount of: Group of answer choices
$30 000
$35 000
$0
$65 000
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