Question

A bad debt of ₹1560 had not been written off and provision for doubtful debts should have been maintained at 10% of trade receivables which arr shown in the trial balance at ₹23120 with a credit provision for bad debts at ₹2320... rectify the error

Answer 1

Answer:

1992

Explanation:

Amount of bad debt = Rs 1560 (Given)

Trade receivables = 10% (Given)

Trial balance = Rs 23120 (Given)

Provision for bad debts = Rs 2320 (Given)

Journal entry -

Provision for bad debts Dr.

To Bad debts Cr.

Provision for bad debts -

23120-1560 = 21560

Amount of debtors provision = 10% of 21560

= 2156

Balance in the provision account after writing off = 2320- 2156

= 164

The provision amount will be -

= 2156 - 164

= 1992