Questions for Homework Question no. 1 DIRECT WRITE-OFF METHOD On February 10, 2020, Ahmed decides that the AED 1,980 acc

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Questions For Homework Question No 1 Direct Write Off Method On February 10 2020 Ahmed Decides That The Aed 1 980 Acc 1 (56.27 KiB) Viewed 17 times

Questions for Homework Question no. 1 DIRECT WRITE-OFF METHOD On February 10, 2020, Ahmed decides that the AED 1,980 account of A. Ayesha is uncollectible and writes it off as a bad debt On April 30%2020. Abdulla unexpectedly pays the amount previously written off. Required: Record the joumal entries about the above transactions, Question no. 1 Percent of sales method: At year-end (December 31), Rashed Company estimates its bad debts as 0.75% of its annual credit sales of AED790,000. Rashed records its bad debts expense for that estimate > On the following February 15, Rashed decides that the AED1,250 account of A. Abdulla is uncollectible and writes it off as a bad debt. On March 314, Abdulla unexpectedly pays the amount previously written off. Required: Prepare the journal entries of Rashed to record these transactions and events of December 31, February 15, and March 31" Question no. 2 Percent of accounts receivable method At cach calendar year-end, Eutaim Electric Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2019, it has outstanding accounts receivable of AED310,000, and it estimates that 2.5% will be uncollectible Required: Prepare the adjusting entry to record bad debts expense for year 2019 under the assumption that the Allowance for Doubtful Accounts has (a) a AED2,400 credit balance before the adjustment and (b) a AED 1,800 debit balance before the adjustment.