In a new business during the y

In a new business during the year ended 31 December 2019 thefollowing debts are found to be bad and are written-off on thedates shown below:

31Jan             S. Seal &Son             $800

31July            H. HaltLtd                $500

31 Oct          A.Alice                       $300

On 31 December 2019 the schedule of remaining accountsreceivable totaling $20,000 is examined and it is decided to makean allowance for doubtful debts of $700.


  1. Bad Debts Account for the year ended 31 December2019.             

  1. Allowance for Doubtful Debts Account for the year ended 31December 2019.

  1. Extract from the Statement of Profit or Loss for the year ended31 December 2019.

  1. Extract from the Statement of Financial Position as at 31December 2019.


a. Bad DebtAccounts
To S. Seal & SonsA/c 800
To H. Halt Ltd. A/c 500
To A. Alice A/c 300
By P and L A/c 1600
1600 1600
a. Doubtful DebtsAccount
To provision for Doubtful debtsA/c 700
By Balance C/d 700
700 700
a. Extracts of Statement ofProfit and Loss A/c
To Bad Debts A/c 1600
To Doubt ful Debts 700
a. Extracts of Statement ofFinancial Position as at 31 December 2019
Provision for Doubt FulDebts 700 Account receivable 21600 19300
Less: Bad Debts 1600
Less: Doubtful Debts 700

Working Notes:

Name of the Debtor Amount if Bad Debt
S. Seal & Son 800
H. Halt Ltd. 500
A. Alice 300
Account ReceivableRemianing 20000 ( After Deducting BadDebt)

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