单选题 Busy Company is a retailer. Most of its sales are made on credit terms. The following information relates to the first 4 years. Year 1 Year 2 Year 3 Year 4 ＄＄＄＄ Trade Debtor as at 31 December 500,000 400,000 550,000 600,000 Bad debt written off for the year ended 31 December - 30,000 10,000 29,000 Busy Company decides to set aside a provision for bad debts equivalent to 5% of trade debtors as at year end. Required: (a)Show how the provision for bad debts would be disclosed in the balance sheet as at 31 January Year 1 to Year 4. (b)Calculate the bad debt expenses for the respective profit and loss account for each of the 4 years.

【正确答案】

【答案解析】(a) Balance Sheet Busy Company Year 1 Year 2 Year 3 Year 4 ＄＄＄＄ Current Assets Trade Debtors 500,000 400,000 550,000 600,000 Less: Provision for Bad Debts (25,000) (20,000) (27,500) (30,000) 475,000 380,000 523,000 570,000 (b) Profit and Loss Account Bad Debt Expenses Year to 31 December Year 1 25,000 Year to 31 December Year 2 Balance of Bad Debt Provision ＄(25,000 - 30,000) 5,000 (Dr) Bad Debt provision required ＄(400,000×5%) 20,000 (Cr) 25,000 Year to 31 December Year 3 Balance of Bad Debt Provision ＄(20,000 - 10,000) 10,000(Cr) Bad Debt provision required ＄(550,000×5%) 27,500(Cr) 17,500 Year to 31 December Year 4 Balance of Bad Debt Provision ＄(27,500 - 29,000) 1,500(Dr) Bad Debt provision required ＄(600,000×5%) 30,000(Cr) 31,500