Covid Ltd has provided you with the following general ledger account balances: 31 March 2022 31 March 2021 $ $ Sales Cost of goods sold Doubtful debt expense Accounts receivable Allowance for doubtful debts Inventory Accounts payable GST 890 000 380 000 2 800 79 800 2 900 40 000 52 200 45 000 Cr 74 000 2 600 49 500 48 960 10 000 Dr
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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.
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- OkyOTcw/a/MjUwNDEyNDM20TEx/details Particulars Credit (RM) 48,400 Debit (RM) Capital Drawings Trade receivables Trade payables Sales Purchases Sales returns Purchases retums Wages and salaries Discounts allowed Discounts received Provision for doubtful debts Insurance Inventory as at 1 September 2018 Utilities 3,500 9,000 12,500 40,400 31,000 300 250 5,600 120 200 300 700 2,400 950 350 10,000 3,000 20,000 Rates Premises Fixtures and fittings Motor van Cash in hand Cash at bank TOTAL 330 14,800 102.050 102.050 Additional information as at 31 August 2019: i. Inventory as at 31 August 2019 amounted RM3,300 ii. An entity from whom there is accounts receivables of RM200 was unable to settle his debt and this amount is to be written off as bad debts. iii. The provision for doubtful debts is 1% of the outstanding trade receivables. iv. The owner took RM100 worth of goods from the business for his own use Required: a) Statement of Profit or Loss and Others Comprehensive Income for the year…On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:Accounts Debit CreditCash $ 25,100Accounts Receivable 46,200Allowance for Uncollectible Accounts $ 4,200Inventory 20,000Land 46,000Equipment 15,000Accumulated Depreciation 1,500Accounts Payable 28,500Notes Payable (6%, due April 1, 2022) 50,000Common Stock 35,000Retained Earnings…Multiple Company provided the following information on December 31, 2020: Accounts payable after deducting debit balances in supplier's accounts of P100.000 Accrued liabilities Note payable - due March 31. 2021 Note payable - due May 31, 2023 Note payable - due December 31, 2022 P500.000 P50.000 P1.000.000 P800.000 P2.000.000 On December 27, 2020 the note payable of P1,000,000 was replaced by an 18-month note for the same amount. During November 1, 2020, the Company breached a covenant pertaining to the May 31, 2023 note, making it due and demandable. On December 24, 2020, the creditor agreed to not to demand payment for 13 months from the date of breach. The note payable maturing on December 31, 2022, which was acquired on June 30, 2018. The creditor has the right to call the note 36 months from issuance How much is the total current liabilities as of December 31. 2020?
- What are the balances of accounts receivable, related allowance account, and bad debts expense on December 31, 2021? A. P7,092,000, P1,110,130, and P756,130 B. P9,616,000, P1,653,370, and P756,130 C. P9,616,000, P1,791,610, and P1,437,610 D. P9,104,000, P1,653,370, and P1,299,3703. The following data are presented concerning the Allowance for Bad Debts of Company A for the year ended December 31, 2023: Allowance for Bad Debts, Jan.1,2023 Write off of Accounts Receivable during 2023 P250,000 50,000 150,000 Recovery of Previously Written off Accounts Receivable Credit Sales for the year 1,200,000 Accounts Receivable, Jan. 1, 2023 Collections during 2023 Required: Determine the following for the year ended December 31,2023: 3.1. Bad Debts Expense assuming the company provides 2% Credit Sales 9,000,000 4,000,000 3.2. Ending Balance of Allowance for Bad debts using the assumption in number 3.1 3.3. Net Realizable Value of Accounts Receivable using the assumption in number 3.1 3.4. Bad Debts Expense assuming the company provides 10% of Ending Accounts Receivable 3.5. Ending Balance of Allowance for Bad debts using the assumption in number 3.4 3.6. Net Realizable Value of Accounts Receivable using the assumption in number 3.4A balance sheet extract of Kahwati Ltd. reported as at 30 June, 2020; Accounts Receivable $981 485 Allowance for Doubtful Debts (18 950) The company recorded the following for the year ending 30 June, 2021: Credit sales income totalling, $1 638 000 Credit sales returns totalling, $21 360 Accounts receivable collections, $1 893 000 Accounts receivable written off – uncollectable $17 695 Based on ageing of accounts receivable analysis undertaken at the end of June, 2021 the company decided that the Allowance for Doubtful Debts account should have a credit balance of $21 250 on the Balance Sheet at June 30, 2021
- Prepare the general journal entries to record the accounts receivable 'write-offs' and the 'write-off recoveries' for 2023. Label Debit accounts with "Dr" and Credit accounts with "Cr". For example: (Dr) Asset $XXXXX, (Cr) Revenues $XXXXX. Ignore GST & narrationsLean Corporation provided the following information regarding its Notes Receivable as at December 31, 2021. NOTE GROSS CARRYING AMOUNT LIFETIME EXPECTED CREDIT LOSSES 12-MONTH EXPECTED CREDIT LOSSES CREDIT RISK ASSESSMENT A P 3,000,000 P 300,000 P 50,000 Low credit risk B 2,000,000 400,000 40,000 31 days past due C 1,000,000 500,000 60,000 Credit-impaired The loss allowance that the entity should recognize as at December 31, 2021 is A. P 590,000 B. P 900,000 C. P 950,000 D. P 1,200,000 WITH SOLUTION PLS. Lean Corporation provided the following information regarding its Notes Receivable as at December 31, 2021. NOTE GROSS CARRYING AMOUNT LIFETIME EXPECTED CREDIT LOSSES 12-MONTH EXPECTED CREDIT LOSSES CREDIT RISK ASSESSMENT A P 3,000,000 P 300,000 P 50,000 Low credit risk B 2,000,000 400,000 40,000 31 days past due C 1,000,000 500,000 60,000 Credit-impaired The loss allowance that the entity should recognize as at December 31, 2021 is A. P 590,000 B. P 900,000 B. P 950,000 C. P 1,200,000
- A Corp. provided the following information regarding its Notes Receivable at December 31, 2021: Note Gross Carrying Amount Lifetime expected credit losses 12-month expected credit losses Credit risk assessment A P3,000,000 P300,000 P50,000 Low credit risk B 2,000,000 400,000 40,000 31 days past dues C 1,000,000 500,000 60,000 Credit-impaired The loss allowance that the entity should recognize at December 31, 2021 is Assuming that the effective interest rates on all notes is 10%, the interest income to be recognized in 2022 profit or loss isAl Hajar Co. provides you the following account balances for the year ended on 31 December 2019. Sales Revenue OMR 100,000 Cr. Accounts Receivable OMR 25,000 Dr. Allowance for Doubtful accounts OMR 1000 Cr. Scenario 1 Bad debts are estimated based on the aging schedule given below Aging class Receivable Balance (OMR) Estimate % of uncollectible 0–30 days 15,000 10 31–60 days 5,000 15 61–90 days 3,500 20 Over 90 days 1,500 25 Actual bad debt - OMR 1,100 and amount recovered - OMR 800. Scenario 2 Estimated amount of bad debts - 12% of receivables, Actual bad debt - OMR 1,500 and amount recovered later on - OMR 900. Scenario 3 Estimated amount of bad debts - 3.5% of Sales, Actual bad debt - OMR 1,300 and amount recovered - OMR 1000. Required: For each scenario given above; a)Estimate the uncollectible amounts. b)Pass adjusting entry to record the estimated uncollectible. c)Pass all the journal entries for actual write off and recovery…Prepare the correct Creditors Control account for May 2020 after taking into account the additional information, errors and omissions. Balance the account Balance b/d June R112 000 Additional information, errors and omissions1. The debit balance in the account of a creditor, R300, must be transferred to the Debtors ledger.2. An invoice for goods purchased from Super Suppliers was entered in the Purchases journal as R6 400 instead of R4 600.3. A credit purchase of equipment from Minto Enterprises was not recorded, R5 000.4. A credit note received from HD Wholesalers for trading goods returned was not recorded in the Purchases Returns Journal, R1 000.5. Stardom Traders, a creditor, charged Oyster Traders interest on overdue account, R50