Hi Dear
The total bad debts expenses in Income Statement will be 1000 + 1250 = 2250 and provision for bad debts is as follows.:
38000- 1000 bad debts = 37000 x 10% = 3700
3700- 2000 old provisions = 1700
so total bad debts expenses for Income statement will be
1700+2250 = 3950
while in Balance sheet:
Debtors 38000
less: bad -1000
less: provision -3700
total debtors 33300
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EXPECT THE BEST, PREPARE FOR THE WORST: M.A. JINNAH
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