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Question 19 Chapter No 16 – Class 11 Unimax
From the following, pass necessary journal entries and show the presentation of provision for discount on debtors in final accounts:
Extracts of Trial Balance as at 31.3.2020
| Particulars | Debit | Credit | |
| Debtors | 3,00,000 | ||
| Bad debts | 13,000 | ||
| Provision for doubtful debts | 30,000 | ||
Adjustments:
(1) write off further bad debts ₹ 10,000.
(2) Provision for doubtful debts is to be kept at 5% of debtors.
(3) Provision for discount on debtors is to be maintained
The solution of Question 19 Chapter No 16 – Class 11 Unimax
Journal | |||||||
| Date | Particulars | Debit | Credit | ||||
| 31.3.2020 | Bad debts A/c | Dr. | 10,000 | ||||
| To Debtors A/c | 10,000 | ||||||
| (Being further bad debts written off) | |||||||
| 31.3.2020 | Profit & Loss A/c | Dr. | 14,500 | ||||
| To Provision for doubtful debts A/c | |||||||
| (Being the provision made the doubtful debts @ 5% on debtors after further bad debts) | |||||||
| 31.3.2020 | Profit & Loss A/c | Dr. | 11,020 | ||||
| To Provision for discount on debtors A/c | 11,020 | ||||||
| (Being the provision made for discount on debtors @ 4% on goods debtors i.e. after further b/d and after provision for doubtful debts) | |||||||
| Profit & Loss A/c for the year ended 31st March,2020 | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Bad debts Add: Further b/d | 13,000 10,000 | ||||
| 23,000 | |||||
| Add: New provision | 14,500 | ||||
| 37,500 | |||||
| Less: old provision | 30,000 | 7,500 | |||
| To Provision for discount on debts A/c | 11,020 | ||||
| Balance Sheet As at 31st March, 2020 | |||||
| Liabilities | Amount | Assets | Amount | ||
| Debtors | 3,00,000 | ||||
| Further b/d | 10,000 | ||||
| 2,90,000 | |||||
| Less: New provision | 14,500 | ||||
| 2,75,500 | |||||
| Less: Dis. on debtors | 11,020 | 2,64,480 | |||
Working Note:
| (1) Calculate of provision for doubtful debts | |
| Total | 3,00,000 |
| Less: debtors | 10,000 |
| 2,90,000 | |
| Provision for doubtful debts | 14,500 |
| (2,90,000 x 5/100) | |
(2)Calculate of provision on debtors | |
| Total Debtors | 3,00,000 |
| Less: Further b/d | 10,000 |
| 2,90,000 | |
| Less: Provision | 14,500 |
| 2,75,500 | |
| Provision for discount on debtors | 11,020 |
| (2,75,500*4/100) |
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