TOPIC 7

QUESTION 1
(i)

RM RM

2020 Dr. Allowance for doubtful debt 4,500

Jan 31 Cr. Accounts receivable 4,500
(To record write-off)

(ii)

RM RM

2020 Dr. Bad debts expense 8,370

Dec 31 Cr. Allowance for doubtful debt 8,370
(To record bad debts expense)

(iii)

(RM) (RM)

2020 Dr. Bad debts expense 4,500 4,500

Jan 31 Cr. Accounts receivable
(To record write-off)

QUESTION 2
(i)

(RM) (RM)

2020 Dr. Bad debts expense 650

Dec 31 Cr. Accounts receivable 650
(To record write-off)

(ii)
Account Receivable
RM RM
Balance b/f 24,500 Allowance for doubtful debt 650
Balance c/f 23,850
24,500 24,500
 Balance c/f of Allowance for Doubtful Debt
= 2% x RM 23,850
= RM 477

Allowance for Doubtful Debt

RM RM
Account receivable 650 Balance b/f 450
Balance c/f 477 Bad debts expense 677
1,127 1,127

(RM) (RM)

Dec 31 Dr. Allowance for doubtful debt 650 650

Cr. Accounts receivable
(To record write-off)

Dec 31 Dr. Bad debts expense 677 677

Cr. Allowance for doubtful debt
(To record bad debts)

QUESTION 3
(i)
Date Dr. Cr.
( RM ) ( RM )
2020 Account Receivable 153,000
Dec 31 Sales 153,000
( To record credit sales )
Sales Return & Allowance 4,200
Account Receivable 4,200
( To record sales return and allowance )
Cash 172,500
Account Receivable 172,500
( To record from account receivable )
Allowance for Doubtful Debts 900
Account Receivable 900
( To record written-off )
 (ii)
Account Receivable
Date Explanation RM Date Explanation RM
2020 2020
Jan 1 Balance b/f 42 600 Dec 31 Cash / Bank 172 500
Dec 31 Sales 153 000 Sales Return & Allowance 4 200
Allowance of Doubtful 900
Debts ( written-off )
Balance c/f 18 000
195 600 195 600
2021
Jan 1 Balance b/f 18 000

Balance of Allowance of Doubtful Debts

= 18 000 x 2%
= 360
Allowance for Doubtful Debts
Date Explanation RM Date Explanation RM
2020 Account Receivable 900 2020
Dec 1 ( written-off ) Jan 1 Balance b/f 852
Balance c/f 360 Bad Debts Expense 408
1 260 1 260
2021
Jan 1 Balance b/f 360

Date Dr. Cr.

( RM ) ( RM )
2020 Bad Debts Expense 408
Dec 31 Allowance for Doubtful Debts 408
( To record bad debts expense )

QUESTION 4
Account Receivable
Date Explanation RM Date Explanation RM
2020 2020
Jul 1 Balance b/f 200,000 Jul 31 Cash / Bank 1,000
31 Allowance of Doubtful 1,000 Allowance of Doubtful 500
Debts ( Recovery ) Debts ( written-off )
Balance c/f 199,500
201,000 201,000
2021
Jan 1 Balance b/f 199,500
 RM 199,500 x 2% = RM 3,990
Allowance for Doubtful Debts
Date Explanation RM Date Explanation RM
2020 Account Receivable 500 2020
July 31 ( written-off ) July 1 Balance b/f 3,000
Account Receivable 1,000
( Recovered )
Balance c/f 3,990 Bad Debts Expense 490
4,490 4,490
2021
Aug 1 Balance b/f 3,990

Date (RM) (RM)

2020 Dr. Bad debt expense 490 490

Jul. 31 Cr. Allowance for doubtful debt
(To record bad debt)

QUESTION 5
(i)
Account Receivable
Date Explanation RM Date Explanation RM
2020 2020
Jan 1 Balance b/f 62,700 Dec31 Cash / Bank ( 333,160 – 330,760
2,400 )
Dec 31 Sales 328,230 Allowance of Doubtful 500
Debts ( written-off )
Sales Returns and 550
Allowances
Balance c/f 57,800
390,930 390,930
2021
Jan 1 Balance b/f 57,800

RM 57,800 x 3% = RM 1,734
 Allowance for Doubtful Debts
Date Explanation RM Date Explanation RM
2020 Account Receivable 1,820 2020
Dec 31 ( written-off ) Jan 1 Balance b/f 1,254
Balance c/f 1,734 Bad Debts Expense 2,300
3,554 3,554
2021
Jan 1 Balance b/f 1,734

(ii)

Date (RM) (RM)

2020 Dr. Allowance for doubtful debt 650 650

Dec 31 Cr. Accounts receivable
(Record write-offs)

QUESTION 6
Account Receivable
Date Explanation RM Date Explanation RM
Balance b/f 775,000 Cash / Bank 650,000
Sales 1,020,000 Allowance of Doubtful 17,500
(17% X 6,000,000) Debts ( written-off )
Balance c/f 1,127,500
1,795,000 1,795,000

2.5% x RM 1,127,500 = RM 28,187.50

Allowance for Doubtful Debts
Date Explanation RM Date Explanation RM
Account Receivable 17,500
( written-off ) Balance b/f 8,050
Balance c/f 28,187.50 Bad Debts Expense 37,637.50
3,554 3,554

Bad Debts Expense

Date Explanation RM Date Explanation RM
Allowance for Doubtful 37,637.50 Statement Profit or Loss 37,637.50
Debt
37,637.50 37,637.50
 QUESTION 7

Account Receivable
Date Explanation RM Date Explanation RM
2019 2019
Jan 1 Balance b/f 10 000 Dec 31 Cash / Bank 215 000
Sales 220 000 Allowance of Doubtful 4 000
Debts ( written-off )
Balance c/f 11 000
230 000 230 000
2020
Jan 1 Balance b/f 11 000

Balance c/f of Allowance fot Doubtful Debts

= 11 000 x 5%
= 550
Allowance for Doubtful Debts
Date Explanation RM Date Explanation RM
2019 Account Receivable 4 000 2019
Dec 1 ( written-off ) Jan 1 Balance b/f 0
Balance c/f 550 Bad Debts Expense 4 550
4 550 4 550
2020
Jan 1 Balance b/f 550

Bad Debts Expense

Date Explanation RM Date Explanation RM
2019 Allowance for Doubtful 4 550 2019 Statement for Profit or
Dec 31 Debt Dec 31 Loss 4 550
4 550 4 550
 Account Receivable
Date Explanation RM Date Explanation RM
2020 2020
Jan 1 Balance b/f 11 000 Dec 31 Cash / Bank 236 000
Sales 230 000 Allowance of Doubtful 2 100
Debts ( written-off )
Bank 500
Bad Debts Recovered 500 Balance c/f 2 900
241 500 241 500
2021
Jan 1 Balance b/f 2 900

Balance c/f of Allowance fot Doubtful Debts

= 2 900 x 5%
= 145
Allowance for Doubtful Debts
Date Explanation RM Date Explanation RM
2020 Account Receivable 2 100 2020
Dec 1 ( written-off ) Jan 1 Balance b/f 550
Account Receivable 500
( Recovered )
Balance c/f 145 Bad Debts Expense 1 195
2 270 2 270
2021
Jan 1 Balance b/f 170

Bad Debts Expense

Date Explanation RM Date Explanation RM
2020 Allowance for Doubtful 1 195 2020 Statement for Profit or 1 195
Dec 31 Debt Dec 31 Loss
1 195 1 195