On 1st January 2019 the account receivable balance brought forward from the previous year totaled 140,900. During the year ended 31 December 2019, total sales amounted to 322,520 of which 85% accounted for credit sales while bad debts written off amounted to 16,816. Further, total payments received during the year amounted to 225,000. This amount included a payment cheque amounting to 12,250 which was later returned due to insufficient funds. The provision for doubtful debts of 4% is to be made of the year end receivable balance.

In the year 2020, total credit sales amounted to 425,000 while 50,000 of the debts were deemed irrecoverable. Total payments received during the year amounted to 375,000. Further, 10% of the debts written off as bad during 2019 were recovered. The provision for doubtful debts of 2% is to be made of the year end receivable balance.

Required:

For the years 2019 and 2020:

1. Receivable account;
2. Bad debt expense account;
3. Bad debts recovered account;
4. Provision for doubtful debts account.

Answer rating: 100% (QA)

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