Question: Aziz Enterprise decides to create a provision for doubtful debts equivalent to 4% of debtors at the year - end. The Bad debts and debtors

Aziz Enterprise decides to create a provision for doubtful debts equivalent to 4% of debtors at the

year

end.

The Bad debts

and

debtors figure for the years ended 31 December are as follows:

Year

Bad Debts

Debtors

(After Bad Debts

ritten O

2017

RM1,200

RM12,500

2018

RM490

RM9,800

2019

RM1,120

RM11,650

2020

RM980

RM13,400

Debt amounting to RM1,53

0 proved

bad and were written off in 2016, was received in full on 30

March 2019.

Required:

(a)

Show the provision

for doubtful debts account for the years 2017

2020.

(

marks)

(b)

Prepare the

Bad Debts

account for

years 2017

2020

(8 marks)

(c)

Explain the term Bad Debts

and provide

TWO

(2)

reasons that may cause it.

(

marks)

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