ABC Limited commenced trading on 1st January 2016 and adjusts its allowance for doubtful debts at the
Question:
ABC Limited commenced trading on 1st January 2016 and adjusts its allowance for doubtful debts at the end of each year on a percentage basis but each year the percentage rate is adjusted according to the market conditions. The following are the details are as for the three years ended 31 December 2016,2017 and 2018 are as follows Bad debts written off year to 31 December Accounts receivable at 31 December after bad debts written off Percentage allowance for doubtful debts $ $ % 2016 6,000 200,000 2 2017 11,000 350,000 4 2018 25,000 400,000 3 1.
You are required to show
a) Bad Debts Accounts for each of the three years
b) Allowance for Doubtful Debts Accounts for each of the three years
c) Balance sheet extracts as at 31st December 2016,2017 and 2018 2.
Explain the “Provision for cash discounts on accounts receivables” with an example
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain