# Question 56 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.56 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

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. 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

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