Question

as on 31st March, 2017 debtors and additional bad debts are 800000 and 10000 respectively. if the provision for bad debts is made at 5% on debtors then amount of such provision Will be​

Answer 1

Answer:

39500

Explanation:

Answer 2

Answer:

The amount of provision will be deducted from the amount of debtors shown in the trial balance of the firm t arrive at the final amount of debtors to be shown in the balance sheet of the firm.

Explanation:

Given:
Debtors= ₹800000
Additional bad debts= ₹10000

Now, the additional bad debts will be taken into consideration, to calculate the amount for provision for bad debts.

∴ Amount of debtors after taking additional bad debts into consideration= 800000-10000
= ₹790000

Now, the provision for bad debts will be made on the amount of debtors obtained.
∴ Provision for bad debts= 5% of 790000
= $\frac{5}{100}$×$790000$
= ₹39500

Now, this amount of provision for bad debts will be deducted from the amount of debtors obtained to calculate the final amount of debtors to be shown in the final balance sheet of the firm.

= 790000-39500
= ₹750500

∴ The amount of debtors that will be shown in the balance sheet will be  ₹750500.