Qualification > Commerce

accounts doubts

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RTB:
ya thanx alot. n do u know da other questions???

lastgift:
A trial balance at 30 June, before making end of year adjustments, showed:
debit
$
credit
$
trade debtors 35 600 -
provision for doubtful debts - 1 160
At 30 June, it was decided to write off a bad debt of $1600 and to make a provision for doubtful
debts equal to 2 % of trade debtors.
What was the total expense in the profit and loss account for bad and doubtful debts for the year
ended 30 June?
A $680 B $1120 C $2080 D $2280

Calculation : provision for doubtful debts for the current year : (35600-1600)=34000 ---> trade debtors
                                                                                     2/100x 34000=680
                 reduction in provision= 1160-680= 480
Therefore amount charged in p/l : Add: reduction in provision     480
                                              less: bad debts                  (1600)
                                              Net amount :                     (1120)
Hope its clear now!

RTB:
if u no da answer for other questions so plzz explain me.

lastgift:
A business prepares its accounts to 31 December. Insurance premiums paid were:
date paid $
January 2006 paid for 6 months to 31 December 2005 940
July 2006 paid for 6 months to 30 June 2006 1120
January 2007 paid for 6 months to 31 December 2006 1245
March 2007 paid for 6 months to 30 June 2007 1880
Which amount should be shown in the profit and loss account for the year ended
31 December 2006?
A $1120 B $2060 C $2365 D $3305

Calculation : 1120+ 1245= 2365
Reason : The amount is needed for the year ending 20x6 and those are the only ones relating to it.

I am doing it for Q4

RTB:
why r u subtracting the bad debt.

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