Question

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1.invoice goods to Sanjay rupees 60000
2.Sanjay return goods of rupees 10000
3.Sanjay become insolvent recovered only 50 paise in a Rupee as final settlement from him..
Pls give journal entry of 3rd adjustment..with perfect narration plss​

Answer 1

Answer:

Bank A/c Dr. 25,000

Bad debts A/c. Dr. 25,000

To Sanjay A/c. 50,000

Explanation:

Net sales to Sanjay = 60,000 less Returns 10,000 = 50,000

Insolvent means he’s unable to pay his debts or loans in full. 50 paisa recovery in a rupee means 50% is recovered from Sanjay, i.e., 50% of 50,000. Balance amount is lost.