Adjusting the provision of general bad debt


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Hi all,

Well I have searched high and low through books and the internet but I cannot find my answer, so I thought who better to ask than those brilliant minds of the accountant forums.

Here’s my problem:

I need to adjust the provision for general bad debt to 3% of the remaining total debtors.
The total debtors are £94,500 and the general bad debt provision is currently £2,000.

My attempt at working it out was to do £94,500 x 3% = £2,835 but I have my doubts that this is right. If it is please confirm and i am happy, if it’s not PLEASE would somebody put me out of my misery and show me how to work it out.

Thanks
 
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Apr 28, 2011
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The general provision does need to be £2,835 (£94,500 x 3%).

As the general bad debt provision is currently £2,000, you would need to make the following adjustment:

CR General bad debt provision - £835
DR Bad and doubtful debts (P&L) - £835
 

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