Specific allowance for doubtful debts recovered adjustment question

Can anyone please tell me whether the answer is £700 or £650 for this question?

You are working on the final accounts of a business with year end 31 Oct X4. The allowance for doubtful debts of £50 was relating to a specific debt provision which was paid during the year. At year end 31 Oct X4 you are required to allow for doubtful debts of 1% of remaining trade receivables. Would the figure in the adjustment columns be £700 or £650 as the £50 was recovered during the year? If the £50 had been paid wouldn't the £50 provision have been removed (debited)?

Extract from Extended Trial Balance



  • law1994
    law1994 Registered Posts: 13
    @Jelly_bean I assume this is sorted now from the date that you posted this? If not the allowance for doubtful debts adjustement should be DR 650 and CR the allowance for doubtful debts 650, the 50 is showing as in there still, so I would assume you should just put the 650 in there making it 700, which is your 1% of the 70,000.

    Should be correct 😊.
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