A bad debt of Rs1560 had not been written off and provision for doubtful debts should have been maintained at 10% of debtors which are shown in the trial balance at Rs 23390 with a credit provision for bad debts at Rs 2320.
what would be the journal entries for this transaction and how to calculate the new provision for bad debts?
please answer to this question
thanks in advance:)
ashish gupta
( student)
(1922 Points)
Replied 20 November 2009
First write off the bad debts
1 Provision for b.debts Dr.
To Bad debts/ Debtor
Then make the provision for 23390-1560= 21830 amount of debtors
Provision amt shud be 2183 and balance in provision A/c after writing off is 2320-1560=760
so make the provision for 2183-760=1423
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