The provision for doubtful debts to be charged to the Profit and Loss Account is

Use the following information to answer the question below

Provision for doubtful debts ————————1,000Cr
Bad debts ———————————————- 500Dr
Debtors ————————————————- 50,000Dr
Additional bad debts to be written off ———– 500
New provision for doubtful debts to stand at 5% of debtors

A. Le 2,500
B. Le 2,475
C. Le 2,450
D. Le 1,000

Correct Answer:

Option A = Le 2,500