Question 56 Chapter 5 of +2-A
56. X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They
admitted Z as a partner for 1/4th share of profits. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at 76,000 and 8,000 respectively. 6,000 of the debtors proved bad. A provision of 5% is to be created on Sundry Debtors for doubtful debts. Pass the necessary
Journal entries.
The solution of Question 56 Chapter 5 of +2-A: –
| Date | Particulars |
L.F. | Debit | Credit | |
| Bad debts A/c | Dr | 6,000 | |||
| To Debtors A/c | 6,000 | ||||
| (Being Bad debts incurred during the year) | |||||
| Provision for Doubtful Debts A/c | Dr | 6,000 | |||
| To Bad Debts A/c | 6,000 | ||||
| (Being Bad debts adjusted with Provision for Doubtful Debts) | |||||
| Revaluation A/c*1 | Dr | 1,500 | |||
| To Provision for Doubtful Debts A/c | 1,500 | ||||
| (Being new provision for doubtful debts created) | |||||
| X’s Capital A/c | Dr | 900 | |||
| Y’s Capital A/c | Dr | 600 | |||
| To Revaluation A/c | 1,500 | ||||
| (Being Loss on revaluation distribution among the old partner in their old profit sharing ratio) | |||||
Working Note: –
Calculation of Provision for Doubtful Debts
Provision is always created on the Closing balance of Debtors
| Closing balance of Debtors | = | Opening balance of Debtors | – Bad Debts |
| = | 76,000 | – | 6,000 | |
| = | 70,000 |
| Total Provision For D/D | = | Closing balance of Debtors X | Percentage of Provision |
| = | 70,000 | X | 5% | |
| = | 3,500 |
| New Provision For D/D | = | Total Provision – | (Old Provision – Bad Debts) |
| = | 3,500 | – | (8,000-6,000) | |
| = | 3,500 |
– | 2,000 | |
| = | 1,500 |
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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