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a) Dalware enterprise estimates that its bad debts amount to 1% of the sales which came to Kshs. 2,250,000 on 31 December, 2019. The following
a) Dalware enterprise estimates that its bad debts amount to 1% of the sales which came to Kshs. 2,250,000 on 31 December, 2019. The following transaction takes place thereafter. st st i. On 31 December 2019, the enterprise th creates a provision for doubtful debts. ii. On 28" February 2020, the account of Masumbuko amounting to Kshs. 1,500 is written off as irrecoverable st iji. On 31 October 2020, Masumbuko settles his account in full. Required: - Journalize the above transaction and post the entries to respective ledger accounts (10 Marks) b) A trader bought motor vehicle costing Kshs. 3,000,000 on 1 January, 2018 on April 1 2020 he bought another one costing one million. The business calculates depreciation on motor vehicle at the rate of 25% on cost per annum. Required:- i. Motor vehicle account ii. Depreciation account iii Provision for depreciation account. (10 Marks)
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