2 (25 Marks) a) Management can choose between two bases in calculating the estimated uncollectible accounts under the allowance method. One basis emphasizes an income statement viewpoint whereas the other emphasizes a statement of financial position viewpoint. Identify the two bases and contrast the two approaches. How do the different points of view affect the amount recognized as Bad Debts Expense during the accounting period? [9 marks] b) On December 31, 2020, Watsonia Berhad had a cash balance per book of RM8,037.40. The bank statements from Affin Bank on the date showed a balance of RM6,824.60. A comparison of the statement with the cash account revealed the following facts: 1. Deposits in transit were RM3,823.30. Outstanding cheques at December, 31 totalled RM752.50. 2. On December, 18 the company issued cheque No. 1181 for RM846 to Gloxinia Sdn Bhd on account. The check, which cleared by the bank in December, was incorrectly journalized and posted by Watsonia Berhad for RM864. 3. Cash sales of RM955.20 on December, 21 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for RM965.20. The bank credited Watsonia Berhad for the correct amount. 4. A RM4,500 note receivable was collected by the bank for Watsonia Berhad on December, 31 plus RM95 interest. The bank charged a collection fee of RM35. No interest has been accrued on the note. 5. On December 31, the bank statement showed an NSF charge of RM1,340 for a cheque issued by Dahlia, a customer; to Watsonia Berhad on account. 6. The statement included a debit memo of RM80 for the printing of additional company cheques. 7. Bank charges of RM740 shown on the bank statement have not been entered in the company's cash book. 8. A monthly direct debit payable to ASTRO for RM550 was wrongly paid twice by the bank