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?
\(\begin{array}{c|c} \text{1/1/06 Debtors} & D2,600\\ \text{1/1/06 Provision for bad debts} & D60\\ \text{31/12/06 New provision provision for bad debts} & \text{5% on debtors}\end{array}\)
What is the amount of the new provision for bad debts?
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Correct Answer: Option A
Explanation:
5% x 2600
\(\frac{5}{100}\) x 2600 = 130
5% x 2600
\(\frac{5}{100}\) x 2600 = 130