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: tStatement of profit or loss (extract) Statement of financial position (extract)
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: tStatement of profit or loss (extract) Statement of financial position (extract)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
niss}
Statement of profit or loss (extract)
Statement of financial position (extract)
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