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1. On July 10, 2021, Ibrahim sold goods to Raghad for SAR 50,000 on credit. On October 10, 2021, Ibrahim determined that he could not collect SAR 5,000 from Raghad. On, December 10, 2021 Ibrahim collected SAR 2,000 of 5,000.

Required:

1. Pass journal entry for sale truncation on July 20.
2. Pass journal entry for bad debt using direct write off method.
3. Pass journal entry for bad debt using allowance method.
4. Pass journal entry to record the collected amount-using write off method.
5. Pass journal entry to record the collected amount-using allowance method.

Answer:

2. On December 1, 2021, Ibrahim, Inc. purchased a copier for SAR 50,000 from Raghad; Ibrahim issued a 9% note due in 90 days in payment for the copier. What adjusting entry by Raghad is required on December 31?

Answer:

3. On December 31, 2021, Ibrahim received his bank statement with a balance of SAR 30,000; the cash general ledger account on that date shows a balance of SAR 50,000.

Ibrahims accountant showed the following:

• The bank returned a customers NSF check for SAR 24,500 received as payment on account receivable.
• The bank statement showed SAR 500 interest earned during December.
• Outstanding checks totaled SAR 5,000
• SAR 1,000 check mailed to the bank for deposit had not reached the bank at the statement date.

Required:

1. Prepare bank reconciliation.
2. Pass adjusting entries.

Answer:

4. On December31, 2021, Ibrahims books showed the following:

• Allowance for doubtful debt SAR 10,000
• Accounts receivable SAR 100,000
• After investigation of accounts, receivable, the Accountant decided that the desired allowance should be SAR 15,000.

Required: Pass adjusting entry for allowance for doubtful accounts.

Answer: