C3 Cinta Enterprise has the following balances on 1 January 2016 Question 19 Not

Question

C3 Cinta Enterprise has the following balances on 1 January 2016 Question 19 Not yet answered Accounts receivable RM12,500 (Debit) Marked out of 1.00 Allowance for doubtful debts RM400 (Credit) u0For the year ended 31 December 2016, the following information were obtained P Flag question Total sales RM100,000 (including cash sales RM30,000) Payment by debtors RM52,500 Return by debtors RM3,000 Bad debts RM1,000 It is the business policy to provide 2% allowance for doubtful debts on the outstanding accounts receivable at the end of the year What is the ending balance of allowance for doubtful debts as at 31 December 2016?? Select one: O a. RM520 O b. RM1,150 O c. RM690 O d. RM650

Explanation / Answer

19.] a. RM 520 ,

Accounts receivables   

Ending Balance of Allowance for doubtful debts as at 31 December 2016 = RM26000 * 2%

= RM520

18.] d. Prepayment , Inventory purchased is recorded in Prepaid inventory Account and inventory that is used is transferred from prepaid inventory to Inventory Account and unused inventory remains in Prepaid inventory Account.

To Balance b/d 12500 By cash 52500 To sale [100000 - 30000] 70000 By sales return and allowances 3000 By Bad debts 1000 By Balance c/d 26000 82500 82500

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