Question no 20 Chapter No 16 - Unimax Class 11

Question No 20 Chapter No 16

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The solution of Question No 20 Chapter No 16 – UNIMAX Class 11

D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

Following are the extract from the trial balance of a firm:

Trial Balance as at 31.3.2020
Particulars	Debit		Credit
Sundry debtors		2,00,000
Bad debts	6,000
Discount	5,000

Adjustment information:

Create a provision for doubtful debts @ 5% on debtors.
Create a provision for discount on debtors @ 3%.
Additional discount given to the debtors ₹ 2,000.

You are required to pass the necessary journal entries and show how the different items would appear in the profit and loss account and the balance sheet of the firm.

The solution of Question No 20 Chapter No 16 – UNIMAX Class 11

Journal
Date	Particulars		L.F.	Debit	Credit
31.3.2020	Discount A/c	Dr.		2,000
	To Sundry Debtors A/c				2,000
	(Being discount of ₹ 2,000 allowed to debtors)

31.3.2020	Profit & Loss A/c	Dr.		9,900
	To Provision for doubtful debts A/c				9,900
	(Being creation of provision for bad doubtful debts @5% on 1,98,000)

31.3.2020	Profit & Loss A/c	Dr.		5,643
	To Provision for discount on debtors A/c				5,643
	(Being provision for discount on debtors created @ 3% on ₹ 1,88,100)

Profit & Loss A/c for the year ended 31st March,2020
Particulars		Amount	Particulars	Amount
To Bad debts	6,000
Add: Further b/d	9,900
	15,900
To Discount	5,000
Add: Additional discount	2,000
	7,000
Add: Provision for Discount		12,643

Balance Sheet As at 31st March, 2020
Liabilities	Amount	Assets		Amount
		Sundry Debtors	2,00,000
		Less: Add. Discount	2,000
			1,98,000
		Less: Provision	9,900
			1,88,100
		Less: Discount	5,643	1,82,457