Homework Answers
Debtors = $60,000
Unadjusted Provision for Doubtful Debts = $5,000
Adjusted Provision for Doubtful Debts = 10% * Debtors
Adjusted Provision for Doubtful Debts = 10% * $60,000
Adjusted Provision for Doubtful Debts = $6,000
Bad Debt Expense = Adjusted Provision for Doubtful Debts -
Unadjusted Provision for Doubtful Debts
Bad Debt Expense = $6,000 - $5,000
Bad Debt Expense = $1,000
Therefore, bad debt expense of $1,000 will be passed to the income statement.
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