XYZ Company, a retail business, is Q2. XYZ Company, a retail business, is facing challenges with bad debts and wants to analyze the impact on its financial statements using the allowance method. Here are the relevant figures in Saudi riyals: (5 Marks)
Total Credit Sales: 800,000 SAR
Beginning Allowance for Doubtful Accounts: 10,000 SAR
Bad Debts Written Off: 15,000 SAR
Ending Accounts Receivable: 120,000 SAR
Bad Debts % (Estimated): 3%
Question:
- Calculate the bad debts expense for the period,
- Determine the net realizable value (NRV) of accounts receivable,
- Analyze the impact of bad debts on the financial statements, and provide recommendations to manage and reduce bad debts.
Q3. XYZ Company, a manufacturing firm in Saudi Arabia, wants to evaluate its fixed asset management using the straight-line depreciation method. Here are the relevant details in Saudi Riyals (SAR): (5 Marks)
Total Fixed Assets: SAR 1,500,000 Accumulated Depreciation: SAR 500,000
Useful Life: 10 years Salvage Value: SAR 100,000
Question: Calculate the book value and the annual depreciation expense of the fixed assets, analyze the impact of fixed assets on financial statements, and provide recommendations to optimize fixed asset management.facing challenges with bad debts and wants to
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