prepare the ledgers for bad debts and provision for doubtful debts and post the journal entries ther

/in /by

prepare the ledgers for bad debts and provision for doubtful debts and post the journal entries there.

aLLOWANCE FOR DOUBTFUL DEBTS Zet Ltd. decided to make allowance for doubtful debts at the rate of 5% of trade receivables at the end of its financial year, that is 31 December each year. He made the first allowance on 31 December 2017. Trade receivables has been as follows: Year 2017 2018 2019 2020 Trade Receivables (£) 114,00 12,200 10,800 11,200.

Journal entries look like this

Bad debt expense

570

          Provision for doubtful debts

570

ate

Account titles and explanation

Ref.

Debit

Credit

31/12/18

Bad debt expense

40

          Provision for doubtful debts

40

Date

Account titles and explanation

Ref.

Debit

Credit

31/12/20

Bad debt expense

17

          Provision for doubtful debts

17

31/12/19

Provision for doubtful debts

70

        Accounts receivable

70