Use the following information to answer this question.

Provision for bad debt 1500

Additional information

1. Bad debt written off amount to 3000
2. Debtors balance as at the end of the year is 28,000
3. Provision for bad debts stand at 10%

How much is to be charged to profit and loss account as provision for bad debt?

Omotola Rasaq

9 years ago

Yeah yeah that's correct.......firstly remove bad debt figure from debtor《28,000-3,000=25,000》and find 10% new provision from the balance《10/100×25,000=2,500》then subtract new provision from the one trial balance《2,500-1,500=1000》

Omotola Rasaq

9 years ago

I'm confused bcos provision for bad debt is different from bad debt.....I think they have to treat separately