Lox Ltd is a company with a financial year-end on 30 April 2018. The following table presents information about some of the companys accounts. All amounts reported in the table below are in pounds sterling ():

Additionally, at the end of April 2018, customers owed Lox 23,000. An opening general doubtful debt provision had been set up in the last financial year for 2,400. By the end of this year, customers who owe the company an amount totalling 1,000 had been declared bankrupt, and no accounting entries had been made for these yet. It has been decided that at 30 April 2018, the end of the current financial year, a general doubtful debt provision of 7% of closing trade receivables is to be set up.

a) Find the missing values for rent expense for the period, insurance expense for the period, cash paid for general expenses, closing balance for prepaid interest, and cash paid for wages during the period, in the table above. Show your workings.

b) Calculate the change in doubtful debt provision for the year, the closing balance for doubtful debt provision and the closing balance for trade receivables at the end of April 2018. Explain how change in doubtful debt provisions affects the profit and loss account. Show your workings.

c) Explain the difference between a bad debt and a doubtful debt. Provide an example for each.

d) What type of account is a doubtful debt provision and where does it appear in the balance sheet?

Opening Cash paid Expense for Closing Balance during the the period Balance eriod Prepaid rent 24,300 5,600 2,700 3,280 7,540 17,000 nsurance payable 320 Prepaid general 1,200 50 expenses Prepaid 5,430 7,800 2,500 Interest 290 Wages payable 1,840 870