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On 1st April 2018 Shiv had a provision for doubtful debts of 650 on 31st March 2019 total debtors amounted to 18408 of which 412 bad debt and had to be written off it was decided to maintain a provision for doubtful debts at 5% of the data on 31st March 2020 debtors where 10320 out of which 320 had to be written off as bad debts provision for doubtful debts is to be maintained at 5% of the debtors?
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On 1st April 2018 Shiv had a provision for doubtful debts of 650 on 31...
**Provision for Doubtful Debts**

**1. Introduction**
Provision for doubtful debts is an accounting concept used to estimate the amount of bad debts that a company is likely to incur in the future. It is created by recording an expense in the financial statements to reflect the possibility of non-payment by customers.

**2. Calculation of Provision for Doubtful Debts in 2018**
On 1st April 2018, Shiv had a provision for doubtful debts of 650. This means that Shiv estimated that a certain amount of debtors would not be able to pay their dues. This provision is created to account for the potential loss that may arise due to non-payment.

**3. Calculation of Bad Debts in 2019**
On 31st March 2019, the total debtors amounted to 18,408 out of which 412 were identified as bad debts and had to be written off. Bad debts are those debts that are deemed to be uncollectible. These debts are removed from the accounts as they are no longer expected to be paid.

**4. Calculation of Provision for Doubtful Debts in 2019**
To maintain a provision for doubtful debts at 5% of the debtors, Shiv needs to calculate the new provision for the year 2019. The provision is a percentage of the debtors that is estimated to be uncollectible.

Total debtors on 31st March 2019: 18,408
Bad debts written off: 412

Provision for doubtful debts for 2019: (18,408 - 412) * 0.05 = 899.80

Therefore, the provision for doubtful debts on 31st March 2019 will be 899.80.

**5. Calculation of Bad Debts in 2020**
On 31st March 2020, the debtors amounted to 10,320 out of which 320 had to be written off as bad debts. These bad debts are removed from the accounts as they are deemed to be uncollectible.

**6. Calculation of Provision for Doubtful Debts in 2020**
To maintain a provision for doubtful debts at 5% of the debtors, Shiv needs to calculate the new provision for the year 2020. The provision is a percentage of the debtors that is estimated to be uncollectible.

Total debtors on 31st March 2020: 10,320
Bad debts written off: 320

Provision for doubtful debts for 2020: (10,320 - 320) * 0.05 = 500

Therefore, the provision for doubtful debts on 31st March 2020 will be 500.

**Conclusion**
In conclusion, provision for doubtful debts is created to account for potential bad debts that a company may incur. It is calculated as a percentage of the debtors and is adjusted based on the actual bad debts written off. Shiv maintained a provision for doubtful debts at 5% of the debtors and adjusted it accordingly in 2019 and 2020 based on the bad debts written off.
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On 1st April 2018 Shiv had a provision for doubtful debts of 650 on 31st March 2019 total debtors amounted to 18408 of which 412 bad debt and had to be written off it was decided to maintain a provision for doubtful debts at 5% of the data on 31st March 2020 debtors where 10320 out of which 320 had to be written off as bad debts provision for doubtful debts is to be maintained at 5% of the debtors?
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On 1st April 2018 Shiv had a provision for doubtful debts of 650 on 31st March 2019 total debtors amounted to 18408 of which 412 bad debt and had to be written off it was decided to maintain a provision for doubtful debts at 5% of the data on 31st March 2020 debtors where 10320 out of which 320 had to be written off as bad debts provision for doubtful debts is to be maintained at 5% of the debtors? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 1st April 2018 Shiv had a provision for doubtful debts of 650 on 31st March 2019 total debtors amounted to 18408 of which 412 bad debt and had to be written off it was decided to maintain a provision for doubtful debts at 5% of the data on 31st March 2020 debtors where 10320 out of which 320 had to be written off as bad debts provision for doubtful debts is to be maintained at 5% of the debtors? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st April 2018 Shiv had a provision for doubtful debts of 650 on 31st March 2019 total debtors amounted to 18408 of which 412 bad debt and had to be written off it was decided to maintain a provision for doubtful debts at 5% of the data on 31st March 2020 debtors where 10320 out of which 320 had to be written off as bad debts provision for doubtful debts is to be maintained at 5% of the debtors?.
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