Bad debts=1250
Provision for bad debts=2000
Debtors=38000
Adjustment
Write off a further sum of Rs.1000 as bad debt and provision for bad debts to be made equal to 10% of debtors
My answer
Allowance for bad debts A/C
Write off Rs.1000
Bad debt exp b/d Rs.1250
Bal c/d(38000810%) Rs.3800
Credit
Balance b/d Rs.2000
Bad debt exp(Bal figure) Rs.4050
Bad debts expense in Income Statement will be Rs.4050
Allowance for bad debts in Balance Sheet will be Rs.3800
Kindly correct me if i am making some mistake
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