Following information are extracted from books of Mr. XYZ Particulars Rs. Bad De

Question

Following information are extracted from books of Mr. XYZ

Particulars

Rs.

Bad Debts (Given in trial balance)

500

Old provisions (Given in trial balance)

800

Sundry Debtors (Given in trial balance)

44,500

Provision for doubtful debts @ 5%

What will be the amount of new provision

?

       ? Rs. 2,225

       ? Rs. 2,525

       ? Rs. 1,925

Particulars

Rs.

Bad Debts (Given in trial balance)

500

Old provisions (Given in trial balance)

800

Sundry Debtors (Given in trial balance)

44,500

Provision for doubtful debts @ 5%

What will be the amount of new provision

?

Explanation / Answer

($44,500 X 5%)

Sundry Debtors $44,500 Provision for doubtful $2,225

($44,500 X 5%)

debts Add: Bad debts $500 Less: Old Provisions ($800) New Provision $1,925

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