AA015 Inventory_Nor Ismah Isa

QUESTION 1
Below are the opening balances of following accounts for Syarikat Denai Jati in
2016.
Accounts Receivable RM208,000
Allowance for doubtful debt RM8,300
Additional Information:
i. Total of credit sales for the year is RM270,000.
ii. Receipts from Accounts Receivable RM262,000.
iii. Allowance for doubtful debts as at December 31st 2016 is estimated to be 5%
of credit sales.

REQUIRED:
(a) Calculate the closing balance of Accounts Receivable.
(b) Calculate the bad debts expense for the year.
(c) Prepare the journal entry to record the bad debts expense for the year.
(d) Calculate the closing balance of Allowance for doubtful debt.
(e) Calculate the net realizable value of the accounts receivable.

QUESTION 2

Yanti Enterpris made sales in 2016 of RM518,000. 80% of the sales are on credit
and the rest are cash sales. The Opening balance of allowance for doubtful debts is
RM7,800. The company estimates 2% of the credit sales can not be collected.

REQUIRED:
(a) Calculate the bad debts expense for the year.
(b) Calculate the closing balance of Allowance for doubtful debt.
(c) Prepare the journal entry to record the bad debts expense for 2016.

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QUESTION 3

The following is a Perniagaan Rudiah information for the year ending 2016.

RM
Net credit sales 100,800
Total cash sales 2,240
Cost of Goods Sold 75,600
Accounts Receivable after bad debt written off 54,000
Opening balance of Allowance for doubtful debt 4,200
Bad debt written off 336
Total operational expenses after deducted bad debt expense 8,316
The estimated allowance for doubtful debts on net credit sales 5%

REQUIRED:

(a) Calculate the bad debts expense for the year.

(b) Prepare the journal entry to record the bad debt written off and the bad debts
expense.
(c) Prepare Allowance for doubtful debt Account.
(d) Prepare the statement of Comprehensive Income for the year ended as at 31
December 2016.
(e) Shows accounts receivable in the statement of financial position as at 31
December 2016.

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QUESTION 1

(a) Accounts Receivable = RM 208,000 + RM 270,000 – RM 262,000

= RM 216,000

(b) Bad debts expense = 5% x RM 270,000

= RM 13,500

(c)
2016 Bad debt expense 13,500
Dec 31 Allowance for doubtful debt 13,500
(to record bad debt expense)

(d)
Allowance for Doubtful Debt (AFDD)
Date Accounts title RM Date Accounts title RM
Dec 1 Balance b/d 8,300
Aug. 31 Balance c/d 21,800 31 Bad Debt exp 13,500
21,800 21,800

(e) Net realizable value of the accounts receivable

= RM 216,000 – RM 21,800
= RM 194,200

QUESTION 2
(a) Bad debts expense = 2% x (80% x RM 518,000)
= RM 8,288

(b)
Allowance for Doubtful Debt (AFDD)
Date Accounts title RM Date Accounts title RM
Dec 1 Balance b/d 7,800
Aug. 31 Balance c/d 16,088 31 Bad Debt exp 8,288
16,088 16,088

(c)
2016 Bad debt expense 8,288
Dec 31 Allowance for doubtful debt 8,288
(to record bad debt expense)

QUESTION 3

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 AA015 Inventory_Nor Ismah Isa

(a) Bad debts expense = 5% x RM 100,800

= RM 5,040

(b)
2016 Allowance for doubtful debt 336
Dec 31 Accounts receivable 336
(to record bad debt written off)

Bad debt expense 5,040

Allowance for doubtful debt 5,040
(to record bad debt expense)

(c)
Allowance for Doubtful Debt (AFDD)
Date Accounts title RM Date Accounts title RM
Acc Receivable 336 Dec 1 Balance b/d 4,200
Aug. 31 Balance c/d 8,904 31 Bad Debt exp 5,040
9,240 9,240

(d)
Perniagaan Rudiah
Statement of comprehensive Income as at 31 December 2016
RM RM
Sales (100,800+2,240) 103,040
Less Operational Expenses (8,316 + 5,040) 13,356
Net Profit 89,684

(e)
Perniagaan Rudiah
Part of Statement of Financial Position as at 31 December 2016
RM RM
Current Assets
Accounts Receivable 54,000
Less: Allowance for Doubtful Debt (8,904)
45,096