Accounting – 4.4 Irrecoverable debts and provision for doubtful debts | e-Consult

Question 3

The following information is available for Greenleaf Ltd for the year ended 31 December 2023:

• The balance of debtors at 1 January 2023 was £30,000.
• Debtors received during the year were £40,000.
• Debtors written off during the year were £6,000.
• The balance of debtors at 31 December 2023 was £25,000.
• The allowance for doubtful debts at 31 December 2023 is calculated using the percentage of debtors at 31 December 2023.
• The percentage of debtors written off during the year is 2.0%

Prepare the following:

• The calculation of the allowance for doubtful debts at 31 December 2023.
• The journal entry to record the adjustment to the provision for doubtful debts.