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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Om and Shiv are partners in a firm sharing profits equally. The Balance Sheet showed Debtors ₹1,50,000 less Provision for Doubtful Debts ₹15,000. An amount of ₹12,000 due from Mohan, a debtor, is to be written off as no longer receivable, and the Provision for Doubtful Debts on the remaining debtors is to be maintained at the current rate. What amount of Provision for Doubtful Debts should be created to maintain its current rate?
Current rate of provision = ₹15,000 / ₹1,50,000 × 100 = 10%.
Debtors after bad debts = ₹1,50,000 – ₹12,000 = ₹1,38,000; required provision @ 10% = ₹13,800.
Balance of provision after adjusting bad debts = ₹15,000 – ₹12,000 = ₹3,000.
Amount to be created = ₹13,800 – ₹3,000 = ₹10,800.
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.
This guide covers "T.S. Grewal Class 12 Chapter 4 Q.49 - Admission of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Admission of a Partner.
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