Solved: Because of the doubtful nature of some debts P

Rudent

Because of the doubtful nature of some debts, P. Rudent instructed his accountants to make a
specific provision in the financial statements for the year ended 30 June 20X3 against the
following debts:

.........................................................£

j. Black..............................................28

C. Green.............................................6

B. Gray.............................................24

Fown Lted.......................................204

He also instructed that a general provision of 5 per cent for doubtful debts should be created on
the other trade receivables, which at 30 June 20X3 amounted to £8,000.

No further business transactions were entered into with any of these credit customers during the
year ended 30 June 20X4, but an amount of £9 was received from J. Black's trustee in
bankruptcy by way of a first dividend; a first and final dividend of £70 was received from the
liquidator of Fawn Ltd and B. Grey paid his debt in full. A further debt of £95 due from S. White
proved to be bad.

On 30 June 20X4 P. Rudent instructed his accountants to maintain the provision existing
against C. Green's debt and to provide for the balance owing by J. Black, and to make further
provision for debts owing by J. Blue £19 and R. Brown £15. The other trade receivables
amounted to £7,500 and the accountants were instructed to make the provision for doubtful
debts equal to 5 per cent of these debts.

Show what entries should be made in P. Rudent's nominal ledger to record these facts.

Because of the doubtful nature of some debts P Rudent

ANSWER
https://solvedquest.com/because-of-the-doubtful-nature-of-some-debts-p-rudent/

Reach out to freelance2040@yahoo.com for enquiry.

Powered by TCPDF (www.tcpdf.org)