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08.4 R & R Ltd prepares his financial statements on 30 June each year. R & R Ltd classifies its trade receivables according to their ages and then relates the provisions to their ages. The following ageing tradereceivables schedule is prepared at 30 June 20X3 to show the ages of outstanding debts and the required provision for doubtfuldebts. Trade receivables $ 33 300 16 750 3 520 61 to 120 days 1 200 Over 120 days Age of debt Provision for doubtful debts 1% of trade receivables) up to 30 days 31 to 60 days 1 2 4 8 The provision for doubtful debts account showed a balance of $780 on 1 July 20x2. On 18 July 20x2, lan Smith who owed $400 to R&R Ltd was declared bankrupt. A payment of $0.30 in the was received from his estates in final settlement of the debt. The remaining balance was written off as a bad debt on 14 February 20X3, Jack Brown whose account of $300 was written off in the last year paid $0.30 in the $ as final On 30 June 20x3, a customer Jim Paul who owed $300 became insolvent and it was acknowledged that $0.60 in as will be received from his estate as final recovery. His debt was included in the above ageing trade receivables schedule as being outstanding for 61 to 120 days. R & R Ltd also wrote off various bad debts totalling $430 during the year. payment of the debt. REQUIRED (a) Prepare Bad debts account for the year ended 30 June 20X3. (b) Prepare Provision for doubtful debts for the year ended 30 June 20x3. (c) Bad debts recovered account

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