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Question 1 (12 Marks) 1. On January 1,2016, Coral Limited signed up for an insurance package. The annual charge is $4,000,000 payable in equal amounts

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Question 1 (12 Marks) 1. On January 1,2016, Coral Limited signed up for an insurance package. The annual charge is $4,000,000 payable in equal amounts at the beginning of each quarter. Intemet expense for the year amounts to $1,200,000 and is to be paid in three equal amounts throughout the year. Analysis of the company's records indicated that the following payments were made: Required: (a) Prepare the Insurance Expense Account. (6 marks) (b) Prepare the Internet Expense Account. (6 marks) Question 2 (13 Marks) 2. Coral Limited has opening balances at January 2017 on their debtors account and provision for doubtful debts account of $800,000 and $500,000 respectively. During the year, Coral Limited made credit sales of $400,000 and received cash from his debtors of $150,000. At December 31, 2017 Coral Limited received the debtors listing and acknowledges that they are unlikely ever to receive debts totalling $200,000. These are to be written off as bad. Coral Limited also wishes to make provisions for 20% of the remaining debtors after writing off the bad debts. Prepare: (a) The debtors account up to January 1,2018. (5 marks) (b) The provision for doubtful debts account up to January 1, 2018. (4 marks) (c) The bad debt expense account up to January 1,2018. (2 marks) (d) The Balance Sheet Extract for 2018. (2 marks) Question 3 (20 Marks) 3. On January 1, 2018, Coral Limited bought a Motor Vehicle for $7,500,000. The company estimates that the Motor Vehicle will have a useful life of 5 years and will have a salvage value of $1,200,000. They decide to provide for depreciation using the Straight Line Method. Prepare: (a) The Joumal entries recording the depreciation provisions up to December 31, 2020. (5 marks) (b) The Provision for Depreciation Account up to December 31, 2020. (10 marks) (c) The Balance Sheet Extract for 2018 - 2020

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