ABFA1153 FINANCIAL ACCOUNTING 1 1 May 2019

Tutorial 10 – Accounting for Trade Receivable

Section 3: Extra exercise questions Mei’s Trading

SFP (extract) as at 31 Dec .…
Question 1 Year 1 Year 2 Year 3
RM RM RM
(a) (i) Current assets
Allowance for Doubtful Debts Account Trade receivables xxx xxx Xxx
Year 1 Year1 Less : Allowance for doubtful debts (500) (600) (400)
Dec31 Bal c/d 500 Jan 1 Bal b/d 400
100
500 500
Yr2 Yr2
Dec31 Bal c/d 600 Jan 1 Bal b/d 500
Ded31 SPL-D/debts 100

600 600
Yr 3 Yr3
Dec31 SPL-D/debts 200 Jan 1 Bal b/d 600
Bal c/d 400

(b) Mei’s Trading

SPL (extract) for the year ended 31 Dec ....
Year 1 Yea r2 Year 3
RM RM RM
Gross profit xxx xxx Xxx
Add : Other Income
Decrease in allowance - - 200
for doubtful debts

Less : Expenses
Increase in allowance 100 100 -
for doubtful debts
Bad debts 420 310 580
ABFA1153 FINANCIAL ACCOUNTING 1 2 May 2019

Question 2
Trade Receivables Control Account Sea & Sun
RM RM SPL (extract) for the year ended 30 April ..
Apr 30 Bal b/d 502,740 Apr 30 Bad Debts 4,500 RM
Bal c/d 498,240 Gross profit xxx
502,740 502,740 Add : Other Income
Decrease in allowance for doubtful debts 1,025

Bad Debts Account Less : Expenses

RM RM Bad debts 11,620
Apr 30 Bal b/d 7,120 Apr 30 Bal c/d 11,620
TRC 4,500
11,620 11,620 Sea & Sun
SFP (extract) as at 30 April ..
RM
Allowance for Doubtful Debts Account Current assets
RM RM Trade receivables 498,240
Apr 30 Doubtful debts 1,025 May 1 Bal b/d 23,220 Less : Allowance for doubtful debts (22,195)
Bal c/d 22,195 476,045
23,220 23,220
May 1 Bal b/d 22,195

Doubtful Debts Account

RM RM
Apr 30 Bal c/d 1,025 Apr 30 AFDD 1,025

Workings RM
Net trade receivables 498,240
(-) Specific allowance (12,480)
485,760

General allowance (485,760 x 2%) 9,715

Specific allowance 12,480
Total allowance for doubtful debts 22,195