Quick Accounting Question plz

persian

How do you get Bad Debts in Q1 ( Final Accounts of a Company )
Thanks

md99

When it says... This final payment represents 10c in the €...
(in the Bank part)

It means that if the payment was €100, the full debt was €1,000 - so, the amount not paid - €900 - is your bad debts figure.

little lady

It depends on what way it is asked in the question but here is a couple of ways

You are told that the provision for bad debts is a % of the debtors so you simply multiple the debtors figure by the % given

To find an increase or decrease in the provision,

You will be given last years figure, and again you will be told that the current year is a % of debtors, once you work out this years figure you minus it from last years and you end up with either an increase or decrease.

Example;
Last years provision was 1000, debtors are 20000, the provision for bad debts is 10%

Debtors 20000 x 10% = 2000 (this years provision)

Last years provision 1000
This years provision 2000
Increase in provision 1000


Hope This Helps

cson

Just to add to that, an increase in the BDP is an expense in the p/l wheras a decrease in BDP is a gain in the p/l

md99

and not to forget to deduct the whole ('new') figure from Debtors in the Balance Sheet ie €2000 in the above example

persian

Thats cleared everything up,thanks again

md99

no worries...best of luck.

persian

Just one other thing if it is'nt too much bother
ive searched marking schemes,asked friends but noone seems to be able to remember - how to get the figure for investment income,the marking schemes are very vague...:( no worries if you cant

colm-ccfc84

Use the info in the trial balance to get the total, which is operating income, then take away all that you have received already and the remainder is a current asset.

md99

yeah as in...

9% Investments €100,000

9% x €100,000 x (however many months/12)

that goes in the P+L account..
then take away whatever you received from it and put that figure in the Balance Sheet.