1
A business started trading on 1 January 2007. During the two years ended 31 December
2007 and 2008 the following debts were written off to the bad debts account on the dates stated:
31 May 2007 F Lamb £175
31 October 2007 A Clover £230
31 January 2008 D Ray £190
30 June 2008 P Clark £75
31 October 2008 J Will £339
On 31 December 2007 there had been a total of debtors remaining of £52,400. It was decided to
make a provision for doubtful debts of £640.
On 31 December 2008 there had been a total of debtors remaining of £58,600. It was decided to
make a provision for doubtful debts of £710.
You are required to show:
(i
) The bad debts account and the provision for doubtful debts account for each of the two years.
(ii
) The relevant extracts from the balance sheets as at 31 December 2007 and 2008.