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Problem - Zet Ltd. decided to make allowance for doubtful debts at the rate of 5% of trade receivables at the end of its financial year, that is 31 December each year. He made the first allowance on 31 December 2017. Trade receivables has been as follows:
2017 - 11,400
2018 - 12,200
2019 - 10,800
2020 - 11,200
Required -
1. Calculate amount to be adjusted to profit each year.
2. Allowance for doubtful debts account for the period 31 December 2017 to 31 December 2020.
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