M. Martin commences business on January 1, 2002. His accounts receivable at December 31, 2003, were $15 000 December 31, 2004, were $12 000 December 31, 2005, were $14 000 A provision for bad debts of 5 per cent is to be created on debts at the end of each year. Use the information above to answer the following questions. (i) Show the Provisions for Bad Debts Account for EACH of the three years.(7 marks) (ii) Show the extracts from the second year's Statement of Financial Position. (2 marks)
