Please explain:
Debtors of Rs. 2,000 will be written off as bad debts and a provision of 5% on debtors for bad and debtors Doubtful debts will be maintained.
Debtors : 45,000 |
Less Provision : 5,000 | 40,000
Dear Student,
Already prepared provision on debtors of Rs 45,000 is Rs 5,000;
When we say that Debtors of Rs 2,000 would be written off as bad debts then the Net debtors would be Rs 43,000 and provision of 5% on it would be maintained which would be Rs 2,150;
So net situation would be Debtors 43,000; Less : Provision Rs 2,150
Regards,
Already prepared provision on debtors of Rs 45,000 is Rs 5,000;
When we say that Debtors of Rs 2,000 would be written off as bad debts then the Net debtors would be Rs 43,000 and provision of 5% on it would be maintained which would be Rs 2,150;
So net situation would be Debtors 43,000; Less : Provision Rs 2,150
Regards,