The trial balance shows debtors 2400;bad debts 221;bad debts reserve 324;for creating a reserve for doubtful debts @10% on debtors ,the p&l a/c will debited by?
Answers
Answer:
1. Bad Debts A/c Dr 300
To Sundry Debtors 300
(To Write off Bad Debts)
2. Profit and Loss A/c Dr 1485
To Provision for Bad and Doubtful Debts 1485
(Provision @5% of Debtors after writing off Bad Debts)
3. Profit and Loss A/c Dr. 565
To Provision for Discount on Debtors 565
(Provision @2% of Debtors after allowing Bad Debts and Provision for Bad Debts)
Profit and Loss account will be debited with:
1. Bad Debts: 300
2.Provision for Bad and Doubtful debts: 1485
3.Provision for Discount on Debtors: 565
In the Balance Sheet
Debtors will appear as:(30000 less300 less1485 less565 =27650)
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Atasang Kingsley Ateno
Answer added by Atasang Kingsley Ateno, Financial Controller , Qatar Golf International
4 years ago
Firstly, Dr. Debtors Account 29,400
Dr, Discount Allow (2%) 600
Cr. Sales 30,000
To recognised the Bad debt in SOI
Secondly. Dr. Bad Debt 300
Cr. Debtors Account 300
For the provision:
Dr. Bad Debt (5%) 1500
Cr. Allowance for doubtful debt (5%) 1500
It was a good question my dear. Hope i answer your question correctly
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Ahmed kandil
Answer added by Ahmed kandil, Job title: Senior Accountant – Executive , Abu Qafrh holding company
4 years ago
Agree with my friends answers
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Linda Jaison
Answer added by Linda Jaison, Accounts Executive , Orostar Explosion Proof Electrical Materials Trading LLC
4 years ago
For Bad debts write off : Bad Debts A/c Dr 300/-
To Sundry Debtors 300/-
For the Provision for Bad Debts:
(Deduct bad debt from debtors to find new provision)
P & L A/c Dr 1485
To Provision for Badebt 1485
(30,000-300 *5%)
Provision for Discount on Debtors:
(Deduct bad debts, provision for bad debt from sundry debtors and make the provision for the good debts)
P&L A/c Dr 564.30
To Provision for Discount on debtors 564.3
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Ajay Dutt
Answer added by Ajay Dutt, Senior Accountant , Concept Zone Group of Companies
4 years ago
Bad Debts 300 (P&L)
To Debtors (XYZ) 300 (Balance Sheet)
Provision (30,000-300*5%)
To Provision for Bad Debts1,485 (Profit & Loss)
To Provision for Bad Debts1,485 (Balance Sheet)
Discount (30,*2%)
Discount allowed564.30 (P&L)
To Debtors (XYZ) 564.30 (Balance Sheet)
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Suprio ghosh
Answer added by Suprio ghosh, Dy. Gen. Manager Accounts & Finance. ( CFO ) , Motherson Advanced Tooling Solutions
4 years ago
I agree with Mr. Venkitaraman Krishna Moorthy. he narrated the answer with a clear views.
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mohammed Sabir
Answer added by mohammed Sabir, SR.ACCOUNTANT , Galadari Brothers
4 years ago
BAD DEBT AC -DEBIT300
PRO FOR BAD DEBTS AC- CREDIT300
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Sadananda Poojary
Answer added by Sadananda Poojary, Accountant , Axis Logistics
4 years ago
Dr. Cr,
1) Provision for bad debts 1485
to Debtors 1485
2) Discount Allowed 564.30
To Debtors 564.30
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Noor Shaikh
Answer added by Noor Shaikh, accountant , wadi maramer group
4 years ago
BAD DEB AC DR.300
TO DEBTORS .300/-
2-PROFIT AND LOSS AC DR1485
TO PROVISSION FOR DD 1485
3-DISCOUNT AC DR594
TO DEBTORS594
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Abdullah Khaan Mohammad
Answer added by Abdullah Khaan Mohammad, Assistant Accounts Manager , Texture Group
2 years ago
Provision for Bad Debts Dr 1500
Sundry Debtors cr 1500
Bad Debts A/c Dr 300
Provision for Bad Debts A/c cr 300
Discount on Debtors Dr 600
Sundry Debtrors cr 600
Actual debtors will be (30000-1500-600=27900)
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Muhammad Hassan Masood
Answer added by Muhammad Hassan Masood, Trainee , SAHIL NGO
2 years ago
Bad Debts A/c Dr 300/-
To Sundry Debtors 300/-
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