Question

On 1-1-2013 M/s A & Co. had a provision for bad debts of Rs.10,880.
The bad debt during the year 2013 amounted to Rs.9,040.
The debtors as at 31-12-2013 were Rs.2,24,000.
Provision for bad debts@5% is maintained by the business.
Bad debts during 2014 and 2015 were Rs.11,680 and Rs.14,160 respectively.
The sundry debtors as at 31-12-14 and 31-12-15 were Rs.2,88,000 and Rs.1,36,000 respectively.
Prepare necessary ledger accounts in the books of M/s A & Co..Also show how these would appear in the profit and loss account and balance sheet for the year 2013 to 2015.

Answer 1

To calculate a monthly bad debt provision, an accountant can multiply the amount of credit sales in the month by a predetermined percentage. For example, if a business estimates that 2 percent of credit sales are usually uncollectible and it sold $10,000 on credit during the month, the bad debt provision will be $200.

Answer 2

Answer:

this is correct solutions