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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › How to make p&l a/c and balance sheet foe question please help
Donnington Manufacturers commenced business on 1 June 1997 and during the first four years of trading, the following information was produced:
Total debtors (before any adjustments)
Bad debts to be written off
£
£
Year to 31 May
1998
232,500
9,500
1999
286,000
11,000
2000
326,800
12,800
2001
354,000
18,000
The business decided to create a provision for bad debts in the first year of trading representing 2% of year-end debtors and to maintain this percentage provision in future years.
Show the relevant profit and loss account entries and balance sheet entries relating to the debtors of the business for each of the four years to 31 May 2001.
You need to watch the free lecture on irrecoverable and doubtful debts.
(I would also suggest that you use an up-to-date question book – we no longer use the terms ‘balance sheet’, ‘profit and loss account’, or ‘provision for bad debts’!)