Question 3 Profit for the yearTrade reccivables[3]Raja is concerned that her profits have been falling and wishes to stop charging the provision for doubtfuldebts in her income statement.REQUIRED(c)Advise Raja on whether she should continue to maintain a provision for doubtful debts. Givereasons for your answer.QUESTION 3Ann was informed that John Lee was unable to pay his outstanding balance of $2 300. It was agreed thathe would pay 40 cents for each dollar owed and he sent a cheque on 26 June 2013 in settlement. Thebalance was written off as a bad debt.NOVEMBER 2013 P22 Q2 (d & e)REQUIRED(d)(e)Prepare the general journal entry to write off the bad debt. A narrative is required.Advise Ann why she should create a provision for doubtful debts.[6]QUESTION 4Sofea provided the following Information about her trade receivables.MAY 2016 P21 & 22 Q2 (e to h)On 28 February 2016 Wade Designs, which owed Sofea $5 100, was declared bankrupt.A cheque for $1 800 was received. The balance of the debt was irrecoverable.1.On 29 February 2016 the remaining trade receivables were:Age of debt (Months)Up to 1 month1 to 3 months3 to 6 monthsAmount ($)18 000Provision for doubtful debts percentage (%)2512200103300202 200

The bad debt expense is the expense occurred due to non payment by debtors or lower payment made by…

Ann was informed that John Lee was unable he would pay 40 cents for each dollar owed balance was written off as a bad debt. REQUIRED (d) (e) Prepare the general journal entry to Advise Ann why she should create a

Ann was informed that John Lee was unable he would pay 40 cents for each dollar owed balance was written off as a bad debt. REQUIRED (d) (e) Prepare the general journal entry to Advise Ann why she should create a

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 31E

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

100%

Question 3

Profit for the year
Trade reccivables
[3]
Raja is concerned that her profits have been falling and wishes to stop charging the provision for doubtful
debts in her income statement.
REQUIRED
(c)
Advise Raja on whether she should continue to maintain a provision for doubtful debts. Give
reasons for your answer.
QUESTION 3
Ann was informed that John Lee was unable to pay his outstanding balance of $2 300. It was agreed that
he would pay 40 cents for each dollar owed and he sent a cheque on 26 June 2013 in settlement. The
balance was written off as a bad debt.
NOVEMBER 2013 P22 Q2 (d & e)
REQUIRED
(d)
(e)
Prepare the general journal entry to write off the bad debt. A narrative is required.
Advise Ann why she should create a provision for doubtful debts.
[6]
QUESTION 4
Sofea provided the following Information about her trade receivables.
MAY 2016 P21 & 22 Q2 (e to h)
On 28 February 2016 Wade Designs, which owed Sofea $5 100, was declared bankrupt.
A cheque for $1 800 was received. The balance of the debt was irrecoverable.
1.
On 29 February 2016 the remaining trade receivables were:
Age of debt (Months)
Up to 1 month
1 to 3 months
3 to 6 months
Amount ($)
18 000
Provision for doubtful debts percentage (%)
2
5
12200
10
3300
20
2 200

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