Examkin

Soru

Zorluk: OrtaAdjustments for Bad Debts and Provision for Doubtful Debts

At 31st December 2025, the ledger of Oluwaseun & Co. showed Trade Debtors of ₦180,000₦180,000 and an existing Provision for Doubtful Debts of ₦4,000₦4,000. An additional bad debt of ₦10,000₦10,000 is to be written off, and the provision for doubtful debts is to be adjusted to 5%5\% of the remaining trade debtors. What is the net amount of Trade Debtors (in ₦₦) to be presented in the Balance Sheet as at 31st December 2025?

Cevap: 161500 ₦

Cevap

The net amount of Trade Debtors to be reported in the Balance Sheet is ₦161,500.
To find the net trade debtors figure for the Balance Sheet, first write off the additional bad debt of ₦10,000 from gross debtors of ₦180,000 to get adjusted debtors of ₦170,000. Next, compute the 5% provision on ₦170,000, which equals ₦8,500. Finally, subtract ₦8,500 from ₦170,000 to obtain ₦161,500.

Adım Adım Çözüm

1
Deduct the additional bad debt written off from the initial trade debtors balance.
Adjusted Trade Debtors = ₦180,000 - ₦10,000 = ₦170,000.
Bad debts discovered at year-end must reduce gross trade debtors before calculating the percentage provision.
2
Calculate the new provision for doubtful debts based on the adjusted trade debtors.
Required Provision = 5% × ₦170,000 = ₦8,500.
The provision percentage applies only to collectible trade debtors after all bad debts have been deducted.
3
Subtract the required provision for doubtful debts from the adjusted trade debtors.
Net Trade Debtors = ₦170,000 - ₦8,500 = ₦161,500.
The Balance Sheet reports trade debtors net of the ending provision balance for doubtful debts.

Anahtar Kavram

Calculation of Net Trade Debtors in the Balance Sheet after write-offs and provision adjustments
Bu soruyu puanla

Konular

Adjustments for Bad Debts and Provision for Doubtful Debts

Bu konudan daha fazla soru