1. **Stating the problem:** We have Trade Receivables (T/Rs) of 50000 shs at the end of the year. Bad Debts of 3000 shs are to be written off. A 2% Provision for bad debts is to be created on the remaining Trade Receivables. We need to find the total amount transferred to the Profit or Loss account. 2. **Formula and explanation:** - Bad Debts written off is an expense directly charged to Profit or Loss. - Provision for bad debts is an estimated expense calculated as a percentage of the remaining Trade Receivables after writing off bad debts. - Total amount transferred to Profit or Loss = Bad Debts written off + Provision for bad debts. 3. **Calculate remaining Trade Receivables after writing off bad debts:** $$\text{Remaining T/Rs} = 50000 - 3000 = 47000$$ 4. **Calculate Provision for bad debts:** $$\text{Provision} = 2\% \times 47000 = 0.02 \times 47000 = 940$$ 5. **Calculate total amount transferred to Profit or Loss:** $$\text{Total} = 3000 + 940 = 3940$$ **Final answer:** The total amount transferred to the Profit or Loss account is 3940 shs.