Question No 25 Chapter No 18 - USHA Publication 11 Class

Question No 25 Chapter No 18

Table of Contents

The solution of Question No 25 Chapter No 18:-

Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution

Bad bets and Provision

25.The balances in the provision for bad debts and provision for discount on debtors stood at Rs 12,400 and Rs 7,500 respectively on 1st April 2017. on 31st March 2018, the debtors stood at Rs 1,60,000. A bill discounted with the bank for Rs 8,000 was dishonoured and entry for this is still to be made
During 2017-18 bad debts written off were Rs 8,600 and discounts allowed were RS 6,900. the firm maintains a provision for bad debts at 5% and a provision for a discount at 2% of the debtors.
Show both these accounts and also give necessary journals entries

The solution of Question No 25 Chapter No 18:-

Date	Particulars		L.F.	Debit	Credit
	Sundry Debtors A/c	Dr.		8,000
	To Bank A/c				8,000
	(Being bill discounted with bank dishonoured.)

	Provision for bad debts A/c	Dr.		8,600
	To Bad debts A/c				8,600
	(Being bad debts written off charged from the provision account.)

	Provision for discount on debtors A/c	Dr.		6,900
	To discount A/c				6,900
	(Being discount allowed charged from Provision.)

	Profit & loss A/c	Dr.		7,192
	To Provision for bad debts A/c				4,600
	To Provision for discount on debtors A/c				2,592
	(Being required amount charged from the profit & loss account.)

Provision for bad debts A/c
Particular	Amount	Particular	Amount
To Bad debts A/c	8,600	By Balance c/d	12,400
To balance c/d	8,400	To Profit & loss A/c	4,600

	17,000		17,000

Provision for discount on debtors A/c
Particular	Amount	Particular	Amount
To Discount A/c	6,900	By Balance b/d	7,500
To balance c/d	3,192	To Profit & loss A/c	2,5,92

	10,092		10,092