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Zorluk: ZorAdjustments for Bad Debts and Provision for Doubtful Debts

At the end of the financial year, a sole trader's trial balance extracted showed Trade Debtors of ₦80,000₦80,000 and an existing Provision for Doubtful Debts of ₦3,000₦3,000. It was decided to write off an additional bad debt of ₦5,000₦5,000 and maintain a provision for doubtful debts at 5%5\% of the remaining trade debtors. What is the net amount of trade debtors to be presented in the Statement of Financial Position (Balance Sheet)?

Cevap: 71250 ₦

Cevap

The net trade debtors figure to be presented in the Balance Sheet is ₦71,250₦71,250.
To determine the net trade debtors figure in the Balance Sheet, unrecorded bad debts of ₦5,000₦5,000 are first written off from gross debtors of ₦80,000₦80,000, resulting in adjusted debtors of ₦75,000₦75,000. The required closing provision for doubtful debts is 5%5\% of ₦75,000₦75,000, which equals ₦3,750₦3,750. Subtracting this closing provision from adjusted debtors gives ₦75,000−₦3,750=₦71,250₦75,000 - ₦3,750 = ₦71,250.

Adım Adım Çözüm

1
Calculate Adjusted Trade Debtors
₦75,000₦75,000
Additional bad debts identified at year-end must be written off from gross trade debtors before calculating the percentage provision for doubtful debts.
2
Calculate Closing Provision for Doubtful Debts
₦3,750₦3,750
The required 5%5\% provision applies to the adjusted trade debtors (5%×₦75,0005\% \times ₦75,000).
3
Compute Net Trade Debtors for Financial Statement Presentation
₦71,250₦71,250
Net trade debtors in the Balance Sheet represents adjusted debtors less the closing provision for doubtful debts (₦75,000−₦3,750₦75,000 - ₦3,750).

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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