A business, which started trading on 1 January 20X5, adjusted its doubtful debt provision at the end of each year on a percentage basis, but each year the percentage rate is adjusted in accordance with the current ‘economic climate’. The following details are available for the three years ended 31 December 20X5, 20X6 and 20X7. 

You are required to show:

(a) Bad Debts Accounts for each of the three years.

(b) Provision for Doubtful Debts Accounts for each of the three years.

(c) Balance Sheet extracts as at 31 December 20X5, 20X6 and 20X7.

Transcribed Image Text:

20X5 20X6 20X7 Bad debts written off year to 31 December 656 Debtors at 31 December 22,000 1,805 40,000 3,847 60,000 Percentage provision for doubtful debts 516