AA015 Chapter 7

Presentation of Accounts Receivable in
the Statement of Financial Position

Syarikat XYZ

Statement of Financial Position (extracted)

As at 30 June 2016

Accounts Receivable 120,000

Deduct: Allowance for doubtful debts 10,000

Net Realizable 110,000
Value

Comprehensive Exercise

Perniagaan Mekar reports the following information in the
statement of financial position as at 31 December 2014.

Accounts Receivable RM 1,000,000
Deduct: Allowance for Doubtful Debts 60,000

940,000

Followings are the transactions related to accounts
receivable for Perniagaan Mekar for the year 2015.

1. Credit sales RM 2,600,000
2. Receipt from accounts receivable 2,300,000
3. Bad debts 65,000

Comprehensive exercise

Requirements :
1) Record the above transactions in general
journal.
2) Show the adjustment ledger of bad debts
expense on 31 December 2015 if the provision is
set on 5% of the balance of accounts receivable.

ANSWER

The solution

date details Dr Cr
2,600,00 2,600,000
1. Accounts receivable 2,300,000
Sales 0
65,000
(record a credit sales) 2,300,00
0
2. Cash
Accounts receivable 65,000

(record a cash receipt)

3. Allowance for Doubtful
Debts
Accounts Receivable
(Acc Rec written-off via
AfDD)

Worksheet

Calculation of Accounts Receivable

Closing Balance
Accounts Receivable =

RM 1,000,000 + RM2,600,000
– RM 2,300,000 – RM65,000
= RM1,235,000

Closing balance Allowance for
Doubtful Debts

AfDD = 5% x RM1,235,000
= RM 61,750

Calculation of bad debts expense
(Adjustment)

Allowance for Doubtful Debts

Acc rec 65,000 Bal b/f 60,000
Bal c/f 66,750
Bad debts
61,750 expense

126,750 Missing 126,750
Figure

Date Details Dr Cr
(RM) (RM)
31st Bad debts expense
Dec. 66,750
Allowance for Doubtful Debts 66,750
(record the bad debt expenses)

Program Matrikulasi Satu Tahun Perakaunan