Treatment of bad debt provision
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Treatment of bad debt provision #shorts
Treatment of bad debt provisions and bad debts:
Things given in trial balance :
1. Bad debt Rs 5,00 ( dr)
2. Provision for bad debt 1,000 ( cr)
3. Sundry debtors = 30,000
Adjustments :
1. Write further debt = 1,000
2. Create provision for bad debt = 5%
Working notes
Sundry debtors = 30,000
Minus new bad debt= 1,000
Net sundry debtors = 30,000-1,000= 29,000
Calculation of new provision = 29,000 X 5/100
= 290 X 5=1,450