2. Gravel Pit Ltd. Had its accounts prepared for the financial year ended March 31,
20X3. At that date trade debtors owed the business $26,800. However, the accounting
officer advised the manager that, based on past experience, bad debts of $4,300
should be written off.
Two (2) years ago a debt of $3,750 owed by E. Beck was written off as bad, but on
October 16, 20X2 the firm was able to collect a cheque for $2,600 from Beck.
Gravel Pit Ltd. Maintains a provision for bad debts account that had a balance of
$2,025 on April 1, 20X2. The provision for bad debts is based on 7% of trade debtors
outstanding at the end of the accounting year.
Prepare the following accounts in the books of Gravel Pit Ltd. For the year ended
March 31, 20X3:
(I) Bad Debts (iv) Bad Debts Provision
(ii) E. Beck (v) Income Statement (Extract)
(iii) Bad Debts Recovered (vi) Balance Sheet (Extract)
3. The financial year of Dominica Trading ends on September 30, 20X7 and its external
auditor was called in to verify the accounting records of the business.
The auditor ascertained that at the end of the financial year outstanding accounts
receivable totalled $61,000 but of this amount $5,800 were to be written off as bad.
The auditor also found that the business was able to collect $1,650 cash on February
6, 20X7 from K. Hayes, whose debt of $3,700 had been written off as bad on
September 30, 20X5.
Dominica Trading maintains a provision for bad debts account that is based on 4% of
total accounts receivable outstanding at the end of each financial year. At October 1,
20X6 accounts receivable amounted to $74,600.
Prepare the following in the books of Dominica Trading for the financial year ended
September 30, 20X7:-
(I) K. Hayes Account (iv) Bad Debts Provision Account
(ii) Bad Debts Recovered Account (v) Income Statement (Extract)

2. Gravel Pit Ltd. Had its accounts prepared for the financial year ended March 31,
20X3. At that date trade debtors owed the business $26,800. However, the accounting
officer advised the manager that, based on past experience, bad debts of $4,300
should be written off.
Two (2) years ago a debt of $3,750 owed by E. Beck was written off as bad, but on
October 16, 20X2 the firm was able to collect a cheque for $2,600 from Beck.
Gravel Pit Ltd. Maintains a provision for bad debts account that had a balance of
$2,025 on April 1, 20X2. The provision for bad debts is based on 7% of trade debtors
outstanding at the end of the accounting year.
Prepare the following accounts in the books of Gravel Pit Ltd. For the year ended
March 31, 20X3:
(I) Bad Debts (iv) Bad Debts Provision
(ii) E. Beck (v) Income Statement (Extract)
(iii) Bad Debts Recovered (vi) Balance Sheet (Extract)
3. The financial year of Dominica Trading ends on September 30, 20X7 and its external
auditor was called in to verify the accounting records of the business.
The auditor ascertained that at the end of the financial year outstanding accounts
receivable totalled $61,000 but of this amount $5,800 were to be written off as bad.
The auditor also found that the business was able to collect $1,650 cash on February
6, 20X7 from K. Hayes, whose debt of $3,700 had been written off as bad on
September 30, 20X5.
Dominica Trading maintains a provision for bad debts account that is based on 4% of
total accounts receivable outstanding at the end of each financial year. At October 1,
20X6 accounts receivable amounted to $74,600.
Prepare the following in the books of Dominica Trading for the financial year ended
September 30, 20X7:-
(I) K. Hayes Account (iv) Bad Debts Provision Account
(ii) Bad Debts Recovered Account (v) Income Statement (Extra