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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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Transcribed Image Text: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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