Question 19 Chapter No 16 – Class 11 Unimax

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)