Clothing wholesalers have been facing cash flow problems due to accounts receivable for several years. The debts of certain debtors are uncollectible, and the company is considering making provisions for bad debts.

(A) How to withdraw and maintain a reserve for doubtful debts? .

(B) Discuss the concept or convention of doubtful debt reserves.

(C) State the difference between bad debts and bad debt reserves.

(D) The fiscal year of the apparel wholesaler is December 31. The company management has provided you with the following information:

Yearly write-off of bad debts for the year ended December 31, the percentage of allowance for doubtful debts of accounts receivable on December 31 after write-off

1Use any amount between RM2,000 to RM3,000 Use any amount between RM50,000 to RM60,000 3

2Use any amount between RM4,000 to RM4,900 Use any amount between RM80,000 to RM85,000 5

3Use any amount between RM1,000 to RM2,500 Use any amount between RM65,000 to RM75,000 2

4Use any amount between RM2,800 and RM5,500 Use any amount between RM90,000 and RM100,000 4

Prepare the following:

(I) Bad debts accounted for four years.

(Ii) The allowance for doubtful debts is calculated for four years.

(Iii) The financial statements for the first, second, third and fourth years as of December 31.