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Question No 18 Chapter No 5
18. Record the following transaction in the book of Aarti:
| 2018 | |
| Mar. 1 | Pooja who owed Rs 60,000 is declared insolvent. First and final composition of 80% is recovered from her |
| Mar. 8 | Received RS 56,000 from Sneh on her insolvency, being 80% of the amount due. |
| Mar. 15 | Recovered Rs 19,900 from Akansha whose account of Rs 24,800 was written off as bad in the past. |
| Mar. 21 | Deep Shikha who owed RS 45,000is declared insolvent. The first instalment of 40% recovered from her. |
| Mar. 31 | A second and final dividend of 30% could re recovered from deep Shikha |
In the Books of Parsha
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2018 | |||||
| Mar.1 | Cash A/c | Dr. | 48,000 | ||
| Bad Debts A/c | Dr. | 12,000 | |||
| To Pooja A/c | 60,000 | ||||
| (Being 80% recovery on the insolvency) | |||||
| Mar.8 | Cash A/c | Dr. | 56,000 | ||
| Bad Debts A/c | Dr. | 14,000 | |||
| To Sneh A/c | 70,000 | ||||
| (Being 80% recovery on the insolvency) | |||||
| Mar.15 | Cash A/c | Dr. | 19,900 | ||
| To Bad debts Recovered A/c | 19,900 | ||||
| (Being Rs 19,900 recovered from bad debts ) | |||||
| Mar.21 | Cash A/c | Dr. | 18,000 | ||
| To Deep Shikha A/c | 18,000 | ||||
| (Being the first instalment 40% received on insolvency.) | |||||
| Mar.31 | Cash A/c | Dr. | 13,500 | ||
| Bad debts A/c | Dr. | 13,500 | |||
| To Sneh A/c | 27,000 | ||||
| (Being the first installment 30% received on insolvency.) | |||||
Working note: -
Mar.1: Pooja who owed Rs 60,000 is declared insolvent. First and final composition of 80% is recovered from her
| Amount Received | = | Amount owned | * | 80% |
| = | 60,000 | X | 80% | |
| = | 28,000/- |
Mar.8: Received Rs 56,000 from Sneh on her insolvency, being 80% of the amount due.
In this entry we did noy received the 20% of the amount which will be calculated in the following ways
| Bad Debts | = | Amount recovered | X | Rate |
| 100- Rate |
| = | 56,000 | X | 20 |
| 100- 20 |
| = | 56,000 | X | 20 |
| 80 | |||
| = | Rs 14,000 |
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Also, Check out the solved question of all Chapters: –
Chapter No. 2 - Theory Base of Accounting
Chapter No. 3 - Origin of Transactions
Chapter No. 4 - Vouchers and transactions
Chapter No. 6 - Accounting for Goods and Services Tax(GST)
Chapter No. 9 - Other Subsidiary Books
Chapter No. 10 - Journal Proper
Chapter No. 11 - Trial Balance
Chapter No. 12 - Bank Reconciliation Statement
Chapter No. 14 - Provisions and Reserves
Chapter No. 15 - Bills of Exchange
Chapter No. 16 - Rectification of Errors
Chapter No. 17 - Financial Statements - (Without Adjustments)
Chapter No. 18 - Financial Statements - (With Adjustments)
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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