The financial year end of Pradami Enterprise is on 31 July every year. It has RM30,800 in its allowance for doubtful debts account as at 31 July 2018. The following information is related to its...

Extracted text: The financial year end of Pradami Enterprise is on 31 July every year. It has RM30,800 in its allowance for doubtful debts account as at 31 July 2018. The following information is related to its account receivables, allowance for doubtful debts and bad debts for two financial years: Q3. Account receivables TRTA Trading Hanabella Enterprise Zara Mewah Enterprise Bad debts to be written off (RM) 250,000 250,000 88,800 500,000 168,000 100,000 |2019 10% 2020 Starbot Sdn. Bhd Mariposa Trading Marmalade Trading 10%


Extracted text: Q3. (Continued) The allowance for doubtful debts of Pradami Enterprise for the year ended 2019 and 2020 are 5% and 4% respectively. REQUIRED: (a) Prepare the bad debts account for the years ended 31 July 2019 and 2020. (b) Write up the allowance for doubtful debts accounts for the years ended 31 July 2019 and 2020. Provide the relevant journal entries for Pradami Enterprise assuming 30% of the bad debt written off for the financial year ended 2020 is recovered on 1 January 2021. (c) (d) If the allowance for doubtful debts is not included in the accounting books during the financial year, which accounting concept would be violated and how this will affect the financial statements of a business? Discuss. your opinion, how Pradami Enterprise estimales the allowance for doubtful debts every year? Explain TWO (2) available methods to estimate the amount. (e) In (f) List ANY FOUR (4) possible reasons that will give rise to bad debts.