A firm has in the past provided for bad debts on the basis of 10% of yr end trade receivables.The provision brought forward(b/d)on 1 Jan 2006 was €520.During the yr ended 31 Dec 2006 the bad debts written off amounted to €620 & the remaining trade receivables totaled €7,400.On 30 September a bad debt of €300 written off in 2003 was recovered.The usual provision for doubtful debts is to be made.
Required for yr ended 31 Dec 2006-
a)The bad debts acc & the provision for bad debts account
b) The relevant extracts from the income statement & balance sheet
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