The closing trade receivables as at 31/12/2020 before bad debts written off were £140,000. The business has increased its allowance on trade receivables from 1% during 2019 to 5% during 2020 on closing trade receivables after bad debts written off, to reflect the worsening economic environment due to COVID. No bad debts were incurred and recorded during the year ended 31/12/2019. The following two transactions have just been recorded in preparation for finalising the financial statements for the year ending 31/12/2020: No 1 2 ASSETS -£20,000 (trade receivables) -£4,000 (trade receivables / Allowance) EXPENSES + £20,000 (bad debts written off) +£4,000 (doubtful debts) (Op) EQUITY REVENUES LIABILITIES What is the "allowance for trade receivables" balance shown on the Statement of Financial Position as at 31/12/2019?

The closing trade receivables as at 31/12/2020 before bad debts written off were £140,000. The business has increased its allowance on trade receivables from 1% during 2019 to 5% during 2020 on closing trade receivables after bad debts written off, to reflect the worsening economic environment due to COVID. No bad debts were incurred and recorded during the year ended 31/12/2019. The following two transactions have just been recorded in preparation for finalising the financial statements for the year ending 31/12/2020: No 1 2 ASSETS -£20,000 (trade receivables) -£4,000 (trade receivables / Allowance) EXPENSES + £20,000 (bad debts written off) +£4,000 (doubtful debts) (Op) EQUITY REVENUES LIABILITIES What is the "allowance for trade receivables" balance shown on the Statement of Financial Position as at 31/12/2019?

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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At 30 June 2018 a company’s allowance for receivables was £39,000 At June 2019, trade receivables totalled £517,000. The company decided to write off debts totalling £37,000. The receivables allowance was to be adjusted to an amount equals to 5% of the trade receivables based on the post events. What figure should appear in the statement of profit and loss account for the year ended 30 June 2019?
C
The following information was taken from the books of Buttercup Dealers at 28 February 2020 before any adjustments or closing entries had been made. Credit losses recovered R1 950.00 Trade debtors (1 March 2019) R78 175.00 Allowance for credit losses R3 512.50 Credit sales R101 250.00 Cash sales R31 875.00 An amount of R425 must be written off as irrecoverable. The allowance for credit losses must be adjusted to 5% of outstanding debtors. Which one of the following amounts represents the net amount in respect of debtors to be disclosed in the statement of financial position of Buttercup Ltd at 28 February 2020?
Zulkifli sells goods on credit to customers, he had the following trade receivables at the end of the past five years: Year Trade Receivables (RM) Bad Debts (RM) 13,800 18,240 2016 400 2017 320 13,320 13,320 2018 2019 460 2020 17,280 It is the business's policy to create a provision for doubtful debts equal to 2.5% of the trade receivables outstanding at the end of each year. The trade receivable balances shown above are after all bad debts write off. His financial year ends on 31 December. On 6 September 2019 Zulkifli received a cheque for RM3,230, it is a recovery of bad debts made in respect of debts written off in 2018. Prepare the following accounts in the ledger of Zulkifli for each of the years ended 31 December 2016 to 2020: (i) Bad Debts (ii) Allowance for Doubtful Debts Copy the table given below, enter the amount of allowance for doubtful debts that appeared in the Income Statement, making clear whether they are debit or credit. Income Statement Year Debit Credit RM RM 2016…
The unadjusted trial balance of X Company on December 31, 2021 showed the Accounts Receivable with a debit balance of P 150,000 and a credit balance of P 3.000 for the Allowance for Bad debts. The management estimated that bad debts will 8% of the outstanding accounts receivable. How much is the bad debts expense for 2021?
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expenseis established as a percentage of credit sales. For 2018, net credit sales totaled $4,500,000, and the estimated baddebt percentage is 1.5%. The allowance for uncollectible accounts had a credit balance of $42,000 at the beginningof 2018 and $40,000, after adjusting entries, at the end of 2018.Required:1. What is bad debt expense for 2018 as a percent of net credit sales?2. Assume Johnson makes no other adjustment of bad debt expense during 2018. Determine the amount ofaccounts receivable written off during 2018.3. If the company uses the direct write-off method, what would bad debt expense be for 2018?
Robertson's account balances at the business year-end show a figure for trade receivables of £103,100. Included in this figure is an amount of £6,500 owed by Reece, which will not be received. Robertson usually creates a provision for doubtful debts of 2% of trade receivables. The figure for trade receivables on the statement of financial position at the year-end should be:
You have been provided with the following information for the reporting period ended 31 December 2019: € Trade receivables balance: as at 31 December 2018 36,600 as at 31 December 2019 21,840 Discounts allowed 3,600 Discounts received 2,120 Sales returns 8,700 Bad debts 12,500 Cheques received as payment for credit sales Cash received as payment for credit sales Bad debts provision: 345,200 51,600 as at 31 December 2018 4,400 as at 31 December 2019 6,900 All cheques and cash received had been lodged in full to the bank account by the reporting date. Requirement What is the revenue figure to be presented in the statement of profit or loss for the reporting period ended 31 December 2019?
Q5 The following trial balance was extracted from the books of Albert Brown, a retailer as at 31 December 2017 Debit Credit Capital Account 110,000 Leasehold Premises at cost Wages Stationery 65,000 6,100 520 28,800 Trade Receivables 17,427 Trade Payables Fittings at cost Lighting and healing Inventory (1/1/2017) Postage and telephone Motor Vans at cost Bad debts written off Cash at Bank 28,400 1,280 20,310 917 10,000 450 6,780 2,850 193,855 Motor Van Expenses Purchases Revenue Bank Term Loan 232,600 10,000 Investments (market value £6,000) Advertising Carriage Inwards Rent and Rates 6,500 3,000 2,750 3,220 11,200 725 Drawings Bank Interest Investment Income Bad Debt Provision 500 1,890 Provision for Depreciation: Leasehold Premises Motors Vans Fittings 6,340 4,600 9,300 392.657 392.657
While accounting for accounts receivable for Easy DVD Ltd, the following information became available to the accountant. The company provides an allowance for doubtful debts at the rate of 3% of accounts receivable at 30 June each year. The balance of the Allowance for doubtful Debts account on 1 July 2018 was $10 000 CR. To 30 June 2019, debts amounting to $12 000 were written off as bad debts. On 30 June 2019, the Accounts Receivable (GST exclusive) account balance was $400 000. On 1 July 2019, Easy DVD Ltd registered for GST and started to account for GST in its accounting system. To 30 June 2020, debts amounting to $16 500 were written off. On 30 June 2020, the Accounts Receivable (GST inclusive) account balance was $495 000. Required: Prepare the necessary general journal entries (narrations not required).
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? O DR: Bad Debts $9,100 CR: Allowance for Doubtful Debts $9,100 O DR: Bad debts $8,000 & CR: Allowance for Doubtful Debts $8,000 DR: Accounts Receivable $8,000 & CR: Allowance for Doubtful Debts $8,000 O DR: Bad Debts $9,600 CR: Allowance for Doubtful Debts $9,600
Frederick, a wholesaler, has the following information relating to the year ended 31 March 2020: (a) Sales are made on both cash and credit terms. At 1 April 2019 trade receivable were $40,000 and the receivables loss allowance was 7.5% of this amount. (b) Included in opening receivable was an amount of $4,000 relating to Lean which went into liquidation on 2 January 2020. (c) (d) Credit sales during the year were $195,600 and cash sales $87,800. (e) Cash received from trade receivables amounted to $192,300. Apart from Lean's debt, $3,200 of other debts were found to be irrecoverable during the year. (f) The receivables loss allowance at the end of the year is to be 7.5% of year end trade receivables. Required: Write up the ledger accounts for the above transactions