Reference no: EM132557585

Ben commenced business on 1st January 2005 and his financial year closes on 31 December. For the year ended 31 December 2005, bad debts written off amounted to R56,000 and a provision for doubtful debts of R104,000 was found necessary.

In the year ended 31 December 2006:

1. bad debts written off amounted to R88,000

2. John Njoroge, whose debt amounting to R8400 was among those written off in 2005, settled his debt

3. total debts outstanding as at 31 December 2006 stood at R3,680,000 4.

It was decided to provide for doubtful debts at 5% of outstanding total debts In the year ended 31 December 2007:

1. Bad debt amounting to R152,000 were written off

2. A recovery of R12,800 was made in respect of debts written off in 2006

3. As at 31 December 2007, total debts outstanding stood at R2,880,000

4. The provision for doubtful debts was raised to 6% of the outstanding total debts.

Required :

Question (i) Bad debts written off account for each of the year ended 31st dec 2005, 2006 & 2007

Question (ii) Bad debts recovered account for each of the years ended 31st dec 2005, 2006, 2007

Question (iii) Provision for doubtful debts account for each of the years ended 31st dec 2005,2006 & 2007

Question (iv) Extracts form the profit and loss account for the years ended 31st dec 2005, 2006 & 2007