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Exam 2013, Questions and answers - S2Accounting and Financial Management 1A (University of New South Wales)Distributing prohibited | Downloaded by ?? ? ([email protected])lOMoARcPSD
ACCT1501 Practice Exam Questions & Solutions 2013S2
QUESTION 1 ACCOUNTS RECEIVABLES (10 marks) On 1stJanuary 2013, SSS Ltd. has a debit balance of $30,000 in Accounts Receivable and a credit balance of $ 4,500 in the Allowance for Doubtful Debts. On 1st July, 2013, one of SSS’s customers, BBB, went bankrupt. BBB owes SSS $2,500 and there is no hope for recovering this amount. On 1stOctober 2013, SSS collected $85,000 from outstanding accounts. SSS Ltd’s financial year ends on 31stDecember. During the year to 31 December 2013, SSS sold goods for cash for $22,000, and on credit for $80,000. Required: Part A (i)If bad debts expense for 2013 is recognised based on 2% of credit sales, prepare the entry to record bad debts expense. (3 marks)
3 marks: 1 mark for each account name, 1 mark for amount
(ii) Calculate the net accounts receivable after recognising the bad debts expense. (3 marks)
ADD
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ACCT1501 Practice Exam Questions & Solutions 2013S2
4,500
1,600
Part B (i)Assume bad debts expense is determined as an adjusting entry at year end. If uncollectible accounts are estimated to be $3,200 from aging receivables, prepare the adjusting entry on the 31stDecember to record bad debts expense (i.e., ignore your answer to Part A, 3 marks).
3 marks: 1 mark for each account name, 1 mark for amount
(ii) Calculate the net accounts receivable after the adjusting entry. (1 mark)
4,500
1,200
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ACCT1501 Practice Exam Questions & Solutions 2013S2 3

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