Willie uses an age profile of debtors to calculate his provision for doubtful debts. He provides the
Question:
Willie uses an age profile of debtors to calculate his provision for doubtful debts.
He provides the following information for the year ended 31 May 20*8, on which to base the calculation.
Required
a) Calculate the provision for doubtful debts.
b) Prepare a balance sheet extract showing how the provision is treated.
Transcribed Image Text:
Time outstanding Amount owed Provision for doubtful debts 0-1 month £23,400 1% 1-3 months £12,900 2% 3-6 months £1,270 3% 6 months- 1 year £730 5% over 1 year £640 20%
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