Use the following information to answer the given question (begin{array}{c|c} text{1/1/06 Debtors} & D2,600\ text{1/1/06…

Use the following information to answer the given question
(begin{array}{c|c} text{1/1/06 Debtors} & D2,600\ text{1/1/06 Provision for bad debts} & D60\ text{31/12/06 New provision provision for bad debts} & text{5% on debtors}end{array})
What is the amount of the new provision for bad debts?

  • A.
    D130
  • B.
    D127
  • C.
    D124
  • D.
    D120
Correct Answer: Option A
Explanation

5% x 2600

(frac{5}{100}) x 2600 = 130

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