Bad Debts in TPL

2008-05-15 6:35 pm

Trial Balance at 30 Sept Year 7

Debtors 18,200 (Debit Side)
Provision for Doubtful Debts 480 (Credit Side)
Bad Bebts written off 560 (Debit Side)

Additional Information at 30 Sept Year 7

Write off 500 as a bad debt and adjust the providion for doubtful debts to 5% of the remaining debtors

The Bad Debts in T/P/L account, the answer is 1,465. But i don't know why? Please help!

回答 (1)

Amy

2008-05-20 12:49 am

✔ 最佳答案

Figure in "Trading and Profit and Loss Account"

Bad Debts 1060 (500+560)
Provision for Bad Debts 405 (18200-500) x 5%) - 480)

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Add up above two items = 1465
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Figure in "Balanace Sheet"

CURRENT ASSETS
Debtor 17700 (18200-500)
Less P. for B.D. 885 (18200-500) x 5%)

BAD DEBTS is the expenses for this year, it will not appear in Balance Sheet.

For normal case, Bad Debt and P. for Bad Debt are two different expenses. It cannot add together to be Bad Debt.

參考: Me

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