Use the following information to answer the given question
\(\begin{array}{c|c} \text{1/1/06 Debtors} & D2,600\\ \text{1/1/06 Provision for bad debts} & D60\\ \text{31/12/06 New provision provision for bad debts} & \text{5% on debtors}\end{array}\)
The provision for bad debts in the profit and loss account is
- D187
- D127
- D67
-
D70
The correct answer is: D
Explanation
5% x 2600
\(\frac{5}{100}\) x 2600 = 130
130 - 60 = 70