Mr. Martin commences business on January 1, 2018. His debtors at December 31, 2019, were $15 000 December 31, 2020, were $12 000 December 31, 2021, were $14 000 A provision for bad debts of 5 per cent is to be created on debts at the end of each year. Use the information above to answer the following questions. i. Show the Provisions for Bad Debts Account for EACH of the three years. ii. Show the Profit and Loss extract for the three years. iii. Show the Balance Sheet extract for the three years.

Mr. Martin commences business on January 1, 2018. His debtors at December 31, 2019, were $15 000 December 31, 2020, were $12 000 December 31, 2021, were $14 000 A provision for bad debts of 5 per cent is to be created on debts at the end of each year. Use the information above to answer the following questions. i. Show the Provisions for Bad Debts Account for EACH of the three years. ii. Show the Profit and Loss extract for the three years. iii. Show the Balance Sheet extract for the three years.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 21CE

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Question

Mr. Martin commences business on January 1, 2018. His debtors at

December 31, 2019, were $15 000

December 31, 2020, were $12 000

December 31, 2021, were $14 000

A provision for bad debts of 5 per cent is to be created on debts at the end of each year.

Use the information above to answer the following questions.

i. Show the Provisions for Bad Debts Account for EACH of the three years.

ii. Show the Profit and Loss extract for the three years.

iii. Show the Balance Sheet extract for the three years.

Definition Definition Receivable amount that a company is owed, but did not receive, and which may not be receivable in future.

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