PLEASE PROVIDE EXPLANATION Clive started business on 1 January 2020. Although he had purchased goods early during the year in anticipation for projected sales, his sales plans did not materialise because of lockdowns caused by Covid-19. His accountant has extracted his trial balance at 31 December 2020: Andrew's Trial Balance as at 31 December 2019 16.000 Capital Purchases 21,000 Sales Bank 15,000 400 6.900 Trade creditors Trade debtors 5,000 Equipment at cost Rent Telephone expenses 8.000 2.000 1,500 37,900 Total 37.900 i) ii) The following information was obtained after the trial balance had been prepared: Stock at 31 December 2019: 10.500 Equipment is to be depreciated at a rate of 15 per cent on cost iii) At 31 December 2010. Andrew owed 500 for telephone expenses and rent had been prepaid by 200 iv) Bad debts of 1,000 should be written off and it is Andrew's policy to maintain a provision for doubtful debts of 5% of remaining debtors (after bad debts have been written off) QUESTION 10 The provision for doubtful debts and the net amount of outstanding trade debtors (after the provision) reported on the balance sheet are respectively A B. Provision for doubtful debts 250; Outstanding trade debtors 3,800 Provision for doubtful debts 250: Outstanding trade debtors 4,750 Provision for doubtful debts 200: Outstanding trade debtors 4,750 Provision for doubtful debts 200; Outstanding trade debtors 3,800 C. D