Question

AB sole trading concern has debtors at the year end amounting to Rs. 2,18,000. One of the debtors, value Rs.8000, is now known to be uncollectable. The company takes a 5% provision for bad debts each year. How much will be the provision for bad debts to be shown in the profit and Loss account​

Answer 1

Answer:

Sundry debtors. 218000

- bad debt. 8000

balance. 210000

-provision for

doubtful debt. 10500

balance. 199500

₹10500 for provision for doubtful debt shown in profit and loss account