Following information are extracted from books of Mr. XYZ Particulars Rs. Bad De
ID: 2445076 • Letter: F
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