A firm makes a provision for doubtful debts of 5% of debtors, also a provision of 24%

for discount on debtors.

On 1 January 19X7 the balances brought forward on the relevant accounts were provision for doubtful debts £672 and provision for discounts on debtors £631.

You are required to:

(a) Enter the balances in the appropriate accounts, using a separate Provision for Doubtful Debts Account.

(b) During 19X7 the firm incurred bad debts £2,960 and allowed discounts jamie On 31 December 19X7 debtors amounted to £25,600. Show the entries in the appropriate accounts for the year 19X7, assuming that the firm’s accounting year ends on 31 December 19X7, also balance sheet extracts at 31 December 19X7.