A business started trading on 1 January 20X7. During the two years ended 31 December 20X7 and 20X8 the following debts were written off to the Bad Debts Account on the dates stated:

On 31 December 20X7 there had been a total of debtors remaining of £52,400. It was decided to make a provision for doubtful debts of £640.

On 31 December 20X8 there had been a total of debtors remaining of £58,600. It was decided to make a provision for doubtful debts of £710.

You are required to show:

(i) The Bad Debts Account and the Provision for Doubtful Debts Account for each of the two years.

(ii) The relevant extracts from the Balance Sheets as at 31 December 20X7 and 20X8.

Transcribed Image Text:

31 May 20X7 31 October 20X7 31 January 20X8 30 June 20X8 31 October 20X8 F Lamb A Clover D Ray P Clark J Will £175 £230 £190 £75 £339