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Zorluk: OrtaAdjustments for Bad Debts and Provision for Doubtful Debts

As at 30th June 2026, the trial balance of Danladi Stores showed Trade Debtors of ₦260,000₦260,000 and an existing Provision for Doubtful Debts of ₦7,500₦7,500. At the end of the financial period, an additional bad debt of ₦10,000₦10,000 is to be written off, and the provision for doubtful debts is to be maintained at 5%5\% of net trade debtors. What is the net trade debtors figure to be presented in the Statement of Financial Position?

Cevap: 237500 ₦

Cevap

The net trade debtors figure to be presented in the Statement of Financial Position is ₦237,500.
To determine the net trade debtors for presentation in the Statement of Financial Position, first write off the additional bad debt of ₦10,000 from the gross trade debtors of ₦260,000, leaving ₦250,000. Next, compute the 5% provision on ₦250,000, which equals ₦12,500. Subtracting the ₦12,500 provision from ₦250,000 gives ₦237,500.

Adım Adım Çözüm

1
Deduct additional bad debts from gross debtors
₦250,000
Additional bad debts must be written off from trade debtors before computing the required percentage provision.
2
Calculate the closing provision for doubtful debts at 5%
₦12,500
The 5% provision applies strictly to the remaining valid debtors (5%×₦250,0005\% \times ₦250,000).
3
Deduct the new provision from adjusted trade debtors
₦237,500
Net trade debtors in the Statement of Financial Position equals adjusted debtors minus the closing provision (₦250,000−₦12,500₦250,000 - ₦12,500).

Anahtar Kavram

Adjustments for Bad Debts and Provision for Doubtful Debts in Final Accounts
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Konular

Adjustments for Bad Debts and Provision for Doubtful Debts

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