The accounts receivable's balance of Diana Sdn. Bhd. as at 30 June 20X1 is RM50,000. In preparing the accounts, Diana Sdn. Bhd. needs to create an allowance for doubtful debts amounting to RM630. During the year ending 30 June 20X2, an amount totalling RM440 is to be written off as bad. The accounts receivable's balance as at 30 June 20x2 was RM100,000 (after bad debts had been written cff) and the allowance for doubtful debts will be 4% of outstanding accounts receivable. To close the accounts on 30 June 20X3, bad debts amounting to RM2,260 should be considered. The allowance for doubtful debts is to be maintained at 3% of accounts receivable. As at 30 June 20X3, the accounts receivable balance (after bad debts had been written off) was RM90,000. You are required to show the following for the year ended 30 June 20X1,20x2 and 20X3: (a) Accounts receivable accounts (b) Allowance for doubtful debts account
The accounts receivable's balance of Diana Sdn. Bhd. as at 30 June 20X1 is RM50,000. In preparing the accounts, Diana Sdn. Bhd. needs to create an allowance for doubtful debts amounting to RM630. During the year ending 30 June 20X2, an amount totalling RM440 is to be written off as bad. The accounts receivable's balance as at 30 June 20x2 was RM100,000 (after bad debts had been written cff) and the allowance for doubtful debts will be 4% of outstanding accounts receivable. To close the accounts on 30 June 20X3, bad debts amounting to RM2,260 should be considered. The allowance for doubtful debts is to be maintained at 3% of accounts receivable. As at 30 June 20X3, the accounts receivable balance (after bad debts had been written off) was RM90,000. You are required to show the following for the year ended 30 June 20X1,20x2 and 20X3: (a) Accounts receivable accounts (b) Allowance for doubtful debts account
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:The accounts receivable's balance of Diana Sdn. Bhd. as at 30 June 20X1 is RM50,000. In preparing the
accounts, Diana Sdn. Bhd. needs to create an allowance for doubtful debts amounting to RM630.
During the year ending 30 June 20X2, an amount totalling RM440 is to be written off as bad. The
accounts receivable's balance as at 30 June 20X2 was RM100,000 (after bad debts had been written cff)
and the allowance for doubtful debts will be 4% of outstanding accounts receivable.
To close the accounts on 30 June 20X3, bad debts amounting to RM2,260 should be considered. The
allowance for doubtful debts is to be maintained at 3% of accounts receivable. As at 30 June 20X3, the
accounts receivable balance (after bad debts had been written off) was RM90,000.
You are required to show the following for the year ended 30 June 20X1, 20X2 and 20x3:
(a) Accounts receivable accounts
(b) Allowance for doubtful debts account
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education