QUESTION 7

a) Journal entries:

January 13 Dt. Allowance for doubtful debts RM3,600

Ct. Account receivable RM3,600
(Recording the write-off)

March 5 Dt. Account receivable RM1,500

Ct. Allowance For Doubtful Debt RM1,500
(Record bad debts recovered)

Dt. Cash RM1,500

Ct. Account receivable RM1,500
(Record cash receipt)

June 20 Dt. Account receivable RM58,000

Ct. Sales RM58,000
(Record credit sales)

July 6 Dt. Sales return RM10,000

Ct. Account receivable RM10,000
(Record sales return)

September 8 Dt. Cash RM62,000

Ct. Account receivable RM62,000
(Record cash receipt)

October 2 Dt. Account receivable RM4,000

Ct. Allowance For Doubtful Debt RM4,000
(Record bad debts recovered)

Dt. Cash RM4,000

Ct. Account receivable RM4,000
(Record cash receipt)

b)
Account receivable
2018 RM 2018 RM
Balance b/d 135,500 Jan 13 Allowance for doubtful debts 3,600
Mac 5 Allowance For Doubtful Debt 1,500 Mac 5 Cash 1,500
Jun 20 Sales 58,000 July 6 Sales return 10,000
Oct 2 Allowance For Doubtful Debt 4,000 Sept 10 Cash 62,000
Oct 2 Cash 4,000
Balance c/d 117,900
199,000 199,000

c) Balance c/d Allowance for doubtful debts

= 3% x RM117,900
= RM3,537
 Allowance for doubtful debts
2018 RM 2018 RM
Jan 13 Account Receivable 3,600 Jan 1 Bal b/d 8,350
Dis 31 Decrease in Allowance
for Doubtful debt 1,213
Dis 31 Bal c/d 3,537
8,350 8,350

Journal entries:

Dt Allowance for doubtful debts RM1,213

Ct. Dec. in Allowance for doubtful debts RM1,213
(Record the decreasing in AFDD)

d)
Syarikat Pelita Ilmu
Statement of Financial Position (partial)
As at 31 December 2018

Account receivable RM117,900

- Allowance for doubtful debts (3,537)
Net realizable value RM114,363