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
W
ritten O
ff
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.
(
12
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.
(
5
marks)
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