QUESTION 2 Right Hand Bhd (RHB) sells heavy machinery. Most of its customers are manufacturers and contractors. All sale transactions are on credit. It closes its account every 30 June. On 1 June 2022, the company's book shows a balance of RM359,300 in its accounts receivable and RM17,965 in its provision for doubtful debt account. The followings are transactions related to its accounts receivable for the month of June 2022: Date 1 June (a) (b) (c) 15 June 27 June 30 June REQUIRED: Transactions Sold goods to one of the main customers, Good Maker Bhd at a listed price of RM25,000. A 7% trade discount was given to this customer. Received cash amounted to RM3,250 together with a 5- month 9% annually, promissory note with face value of RM20,000 dated 1 June 2022. Sold goods for RM150,000 on credit to Juta Manufacturing. RHB uses the net method in recording accounts receivable. The term of the sale is 5/10, n/60. A customer, Laju Construction was declared bankrupt, RHB decided to write off RM7,400 balance owed by the company. The company decided to allow 5% of sales on 15 June, as uncollectible. Prepare journal entries and adjustment(s) (if any) to record all the transactions in June 2022. Describe the presentation of accounts receivable in the Statement of Financial Position of the company. Short-term receivables are shown at net realizable value. Briefly explain the meaning of net realizable value and how it can be determined.
QUESTION 2 Right Hand Bhd (RHB) sells heavy machinery. Most of its customers are manufacturers and contractors. All sale transactions are on credit. It closes its account every 30 June. On 1 June 2022, the company's book shows a balance of RM359,300 in its accounts receivable and RM17,965 in its provision for doubtful debt account. The followings are transactions related to its accounts receivable for the month of June 2022: Date 1 June (a) (b) (c) 15 June 27 June 30 June REQUIRED: Transactions Sold goods to one of the main customers, Good Maker Bhd at a listed price of RM25,000. A 7% trade discount was given to this customer. Received cash amounted to RM3,250 together with a 5- month 9% annually, promissory note with face value of RM20,000 dated 1 June 2022. Sold goods for RM150,000 on credit to Juta Manufacturing. RHB uses the net method in recording accounts receivable. The term of the sale is 5/10, n/60. A customer, Laju Construction was declared bankrupt, RHB decided to write off RM7,400 balance owed by the company. The company decided to allow 5% of sales on 15 June, as uncollectible. Prepare journal entries and adjustment(s) (if any) to record all the transactions in June 2022. Describe the presentation of accounts receivable in the Statement of Financial Position of the company. Short-term receivables are shown at net realizable value. Briefly explain the meaning of net realizable value and how it can be determined.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:QUESTION 2
Right Hand Bhd (RHB) sells heavy machinery. Most of its customers are
manufacturers and contractors. All sale transactions are on credit. It closes its
account every 30 June. On 1 June 2022, the company's book shows a balance of
RM359,300 in its accounts receivable and RM17,965 in its provision for doubtful debt
account. The followings are transactions related to its accounts receivable for the
month of June 2022:
Date
1 June
(a)
(b)
(c)
15
June
27
June
30
June
REQUIRED:
Transactions
Sold goods to one of the main customers, Good Maker Bhd at a
listed price of RM25,000. A 7% trade discount was given to this
customer. Received cash amounted to RM3,250 together with a 5-
month 9% annually, promissory note with face value of RM20,000
dated 1 June 2022.
Sold goods for RM150,000 on credit to Juta Manufacturing. RHB
uses the net method in recording accounts receivable. The term of
the sale is 5/10, n/60.
A customer, Laju Construction was declared bankrupt, RHB decided
to write off RM7,400 balance owed by the company.
The company decided to allow 5% of sales on 15 June, as
uncollectible.
Prepare journal entries and adjustment(s) (if any) to record all the transactions
in June 2022.
Describe the presentation of accounts receivable in the Statement of Financial
Position of the company.
Short-term receivables are shown at net realizable value. Briefly explain the
meaning of net realizable value and how it can be determined.
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