Use the information below to answer questions
Sundry debtor..................N20,000
Provision for bad debts........N500
Provision for bad debt at 4% of sundry debtors.
Calculate the provision to be taken to the balance sheet?
The business owner made a provision of 500 as bad debt. Total debt owed was 20,000. At the end of the period, bad debts was 4%. Hence we have;
4% x 20000
0.04 x 20000 = 800
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