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These amounts had been entered into the Receivables Account, and a balance extracted.
On investigation, the following was discovered:
a) Paul had paid Ksh 2,200 of his previously irrecoverable debt (we do not expect to receive any more)
b) George had still not paid the Ksh 8,000 owing, and must now be regarded as irrecoverable
c) Ann had paid her debt of Ksh 2,000 in full
d) Ringo was owing Ksh 4,000 which is irrecoverable
e) Mick was owing Ksh 6,000 and is a doubtful debt
f It was decided to maintain the general allowance for receivables at 4% of the
remaining debts
(Note: the amounts received from Paul and Ann are included in the total cash receipts for the year of Ksh 238,000).
Required:
(a) Write up the Accounts Receivable, Irrecoverable Debts Expense, and Allowance for Receivables accounts. (8 marks)
(b) Show extracts from Cilla’s Statement of Financial Position and Statement of Profit or
Loss. (2 marks)Please do not simply type out a full question and expect to be provided with a full answer. You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about and then I will explain.
Everything needed to be able to answer this question is covered in our free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
(Also, of course, you cannot be asked to write up accounts in the exam, even though you are expected to understand the double entries.)
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