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Question -

An extract of Trial balance from the books of Tahiliani and Sons Enterprises on Marc 31 2017 is given below:

Name of the Account

Debit Amount

Rs

Credit Amount

Rs

 

 

 

Sundry debtors

50,000

 

Bad debts

6,000

 

Provision for doubtful debts

 

4,000
Additional Information:
•          Bad Debts proved bad; however, not recorded amounted to Rs 2,000.
•          Provision is to be maintained at 8% of debtors
Give necessary accounting entries for writing off the bad debts and creating the provision for doubtful debts account. Also, show the necessary accounts.



Answer -

Date

 

Particulars

 

L.F.

Debit Amount Rs

Credit Amount Rs

 

 

 

 

 

 

 

 

Bad Debt A/c

Dr.

 

2,000

 

 

 

To Debtors A/c

 

 

 

2,000

 

(Further bad debt charged from Debtors Account)

 

 

 

 

 

 

 

 

 

 

 

Provision for Doubtful Debt A/c

Dr.

 

8,000

 

 

 

To Bad Debt A/c

 

 

 

8,000

 

(Amount of bad debt transferred to

Provision for Doubtful Debt Account)

 

 

 

 

 

 

 

 

 

 

Profit and Loss A/c

Dr.

 

7,840

 

 

 

To Provision for Doubtful Debt A/c

 

 

 

7,840

 

(Amount of Provision for Doubtful Debt transferred

 to Profit and Loss Account)

 

 

 

 

 

 

 

 

 

  

Bad Debt Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount 

Rs

Date

Particulars

J.F.

Amount

 Rs

2017

 

 

 

2017

 

 

 

Mar.31

Balance b/d

 

6,000

Mar.31

Provision for Doubtful

 

 

Mar.31

Debtors

 

2,000

 

Debt

 

 8,000

 

 

 

8,000

 

 

 

8,000

 

 

 

 

 

 

 

 

 

Debtors Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount 

Rs

Date

Particulars

J.F.

Amount

 Rs

2017

 

 

 

2017

 

 

 

Mar.31

Balance b/d

 

50,000

Mar.31

Bad Debt

 

2,000

 

 

 

 

Mar.31

Balance c/d

 

48,000

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

Provision for Doubtful Debts Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount 

Rs

Date

Particulars

J.F.

Amount

 Rs

2017 

 

 

 

2017

 

 

 

31 Mar.

Bad Debt (6,000 + 2,000)

 

8,000

Apr.01

Balance b/d

 

4,000

31 Mar.

Balance c/d

 

3,840

Mar.31

Profit and Loss

 

7,840

 

 

 

11,840

 

 

 

11,840

 

 

 

 

 

 

 

 

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