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Question -

The following balances appeared in the trial balance of M/s Kapil Traders as on March 31, 2017

 

₹

Sundry debtors

30,500

Bad debts

500

Provision for doubtful debts

2,000
The partners of the firm agreed to records the following adjustments in the books of the Firm. Further bad debts ₹300. Maintain provision for bad debts 10%. Show the following adjustments in the bad debts account, provision account, debtors account, profit and loss account and balance sheet.



Answer -

Profit and Loss Account

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Bad Debts

500

Add: Further Bad Debts

300

Add: New Provision

3,020

Less: Old Provision

2,000

1,820

Balance Sheet

Liabilities

Amount

₹

Assets

Amount

₹

Debtors

30,500

Less: Further Bad Debts

300

Less: New Provision

3,020

27,180

 

Debtors Account

Dr.

Cr.

Date

Particulars

Amount

₹

Date

Particulars

Amount

₹

2017

2017

March 31

Balance b/d

30,500

March 31

Further Bad Debts

300

March 31

Provision for Doubtful Debts

3,020

March 31

Balance c/d

27,180

30,500

30,500

Bad Debts Account

Dr.

Cr.

Date

Particulars

Amount

₹

Date

Particulars

Amount

₹

2017

2017

March 31

Balance b/d

500

March 31

Provision for Doubtful Debts

800

(As per the Trial Balance)

March 31

Sundry Debtors

300

800

800

 

Provision for Doubtful Debts Account

Dr.

Cr.

Date

Particulars

Amount

₹

Date

Particulars

Amount

₹

2017

2016

March 31

Bad Debt

800

April 01

Balance b/d (Old Provision)

2,000

April 01

Profit and Loss

1,820

(Balancing figure)

March 31

Balance b/d

3,020

(New Provision)

3,820

3,820

 

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