The financial year end of Pradami Enterprise is on 31 July every year. It has RM30,800in its allowance for doubtful debts account as at 31 July 2018. The followinginformation is related to its account receivables, allowance for doubtful debts and baddebts for two financial years:Q3.Account receivablesTRTA TradingHanabella EnterpriseZara Mewah EnterpriseBad debts to be written off(RM)250,000250,00088,800500,000168,000100,000|201910%2020Starbot Sdn. BhdMariposa TradingMarmalade Trading10% Q3. (Continued)The allowance for doubtful debts of Pradami Enterprise for the year ended 2019 and2020 are 5% and 4% respectively.REQUIRED:(a)Prepare the bad debts account for the years ended 31 July 2019 and 2020.(b)Write up the allowance for doubtful debts accounts for the years ended 31 July2019 and 2020.Provide the relevant journal entries for Pradami Enterprise assuming 30% of thebad debt written off for the financial year ended 2020 is recovered on 1 January2021.(c)(d)If the allowance for doubtful debts is not included in the accounting booksduring the financial year, which accounting concept would be violated and howthis will affect the financial statements of a business? Discuss.your opinion, how Pradami Enterprise estimales the allowance for doubtfuldebts every year? Explain TWO (2) available methods to estimate the amount.(e)In(f)List ANY FOUR (4) possible reasons that will give rise to bad debts.

The financial year end of Pradami Enterprise is on 31 July every year. It has RM30,800 in its allowance for doubtful debts account as at 31 July 2018. The following information is related to its account receivables, allowance for doubtful debts and bad debts for two financial years: Account receivables TRTA Trading Hanabella Enterprise Zara Mewah Enterprise Starbot Sdn. Bhd Mariposa Trading Marmalade Trading Bad debts to be written off (RM) 250,000 250,000 88,800 500,000 168,000 100,000 2019 10% 2020 10%

The financial year end of Pradami Enterprise is on 31 July every year. It has RM30,800 in its allowance for doubtful debts account as at 31 July 2018. The following information is related to its account receivables, allowance for doubtful debts and bad debts for two financial years: Account receivables TRTA Trading Hanabella Enterprise Zara Mewah Enterprise Starbot Sdn. Bhd Mariposa Trading Marmalade Trading Bad debts to be written off (RM) 250,000 250,000 88,800 500,000 168,000 100,000 2019 10% 2020 10%

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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