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Bookkeeping question re extended trial balance
Am stuck! Am doing a home bookkeeping course. Am doing an extended trial balance. I have the headings as Account name/trial balance/ adjustments/P&L Acc/Balance Sheet.
One of the questions is: A provision for bad debts needs introducing of 5%.
The other question is:
'Depreciation needs providing as follows:
Premises minus �1000
Fixtures minus �200
Motor Vehicles �250
(This is IN ADDITION to 3 previous depreciations entered in the trial balance for these accounts.)
Into which columns do Ienter the above further 3 depreciations and the provision of bad debts at 5%?
I would be so grateful for your help! I've been at this all weekend and have done nothing else!
One of the questions is: A provision for bad debts needs introducing of 5%.
The other question is:
'Depreciation needs providing as follows:
Premises minus �1000
Fixtures minus �200
Motor Vehicles �250
(This is IN ADDITION to 3 previous depreciations entered in the trial balance for these accounts.)
Into which columns do Ienter the above further 3 depreciations and the provision of bad debts at 5%?
I would be so grateful for your help! I've been at this all weekend and have done nothing else!
Answers
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For the bad debt provision:
Calculate 5% of debtors figure (which will already be in the trial balance).
Dr Bad Debt Charge in the P&L account heading
Cr either Debtors or Bad Debt Provision in the Balance Sheet heading (either would be correct)
For the depreciation:
Depreciation is normally the reduction in value of assets so normally Dr a Depreciation Charge account in the P&L and Cr the respective asset values. If the ones that say "minus" actually mean a negative depreciation (ie that the value of the asset has gone up) then those ones would be the other way around so Dr Asset value, Cr Depreciation Charge in the P&L
Calculate 5% of debtors figure (which will already be in the trial balance).
Dr Bad Debt Charge in the P&L account heading
Cr either Debtors or Bad Debt Provision in the Balance Sheet heading (either would be correct)
For the depreciation:
Depreciation is normally the reduction in value of assets so normally Dr a Depreciation Charge account in the P&L and Cr the respective asset values. If the ones that say "minus" actually mean a negative depreciation (ie that the value of the asset has gone up) then those ones would be the other way around so Dr Asset value, Cr Depreciation Charge in the P&L
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