The Table Company continues trading during Year 4. The customers who were doubtful at the end of Year 3 respond to enquiries and pay the amounts due. No adjustment is made to the provision for doubtful debts at that point. At the end of Year 4, the statement of financial position (balance sheet) comprises receivables (debtors) amounting to £5,700 minus provision of £500, other assets of £12,000 and £17,200 ownership interest of which £5,000 is the profit of the year. A review of the list of receivables (debtors) causes considerable doubt regarding an amount of £700. It is decided that the provision for doubtful debts at the end of Year 4 should be £700.

Required:

Prepare an accounting equation spreadsheet to show the effect of the bad debt being recognised and of the decision to make a provision at the end of Year 4.