On 30 September, Emerald Travel has RM540,250 of accounts receivable Emerald uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful debts accounts of RM13,750 Sold RM325,000 of merchandise (that cost RM178,500) to customers on credit Received RM425,100 cash in payment of accounts receivable Wrote off RM16,700 of uncollectible accounts receivable In adjusting the accounts on 31 October, its fiscal year end, the company estimated that 3 0 of accounts receivable will be uncollectible Required Prepare journal entries to record the above selected October transactions The company uses the perpetual inventory system (10 marks) Show the amount to be debited to the statement of comprehensive accounts and how Accounts Receivable and the Allowance Provision for Doubtful debts appear on its 31 October statement of financial position (5 marks)

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Posted on Oct 22, 2024

On 30 September, Emerald Travel has RM540,250 of accounts receivable. Emerald uses the allowance method of accounting for bad debts and has an existing credit

On 30 September, Emerald Travel has RM540,250 of accounts receivable. Emerald uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful debts accounts of RM13,750.

Sold RM325,000 of merchandise (that cost RM178,500) to customers on credit.
Received RM425,100 cash in payment of accounts receivable.
Wrote off RM16,700 of uncollectible accounts receivable.
In adjusting the accounts on 31 October, its fiscal year-end, the company estimated that 3.0% of accounts receivable will be uncollectible.

Required:

Prepare journal entries to record the above selected October transactions. The company uses the perpetual inventory system. (10 marks)

Show the amount to be debited to the statement of comprehensive accounts and how Accounts Receivable and the Allowance/Provision for Doubtful debts appear on its 31 October statement of financial position. (5 marks)