✔ 最佳答案
Debtors $59000
provision for doubtful debts as at 1/1/2006 $3300
Additional information:
Provision for doubtful debts was to be maintained at 4% on the remaining trade debtors balance.
Balance of provision for doubtful debts in balance sheet as at 1/1/2006 should be
$59,000 * 4%
= $2,360
Since there was provision of $3,300 as at 1/1/06, the following entries should be made to reduce the provision to $2,360 (i.e. reduced by $3,300 - $2,360 = $940)
Dr. Provision for doubtful debts (Balance sheet items) $940
Cr. Provision for doubtful debts written back (Profit & loss account items) $940
Extra information:
In balance sheet, you can present the net trade debtors:
Accounts receivable $56,640.
But in the notes to have more disclosure, the total amounts and provision should be made separatelu
Trade debtor $59,000
Less provision for doubtful debts ($2,360)
Net trade debtors $56,640