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A bad debt of ₹1560 had not been written off and provision for doubtful debts should have been maintained at 10% of trade receivables which arr shown in the trial balance at ₹23120 with a credit provision for bad debts at ₹2320... rectify the error |
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Answer» Answer: 1992 Explanation: AMOUNT of BAD debt = Rs 1560 (Given) Trade receivables = 10% (Given) Trial balance = Rs 23120 (Given) PROVISION for bad debts = Rs 2320 (Given) Journal entry - Provision for bad debts Dr. To Bad debts Cr. Provision for bad debts - 23120-1560 = 21560 Amount of debtors provision = 10% of 21560 = 2156 Balance in the provision account after writing off = 2320- 2156 = 164 The provision amount will be - = 2156 - 164 = 1992 |
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