Question

An extract of Trial balance from the books of Tahiliani and Sons Enterprises on Mar 31 2017 is given below:

Name of the Account	Debit Amount  ₹	Credit Amount ₹
Sundry debtors	50,000
Bad debts	6,000
Provision for doubtful debts		4,000

Additional Information:

• Bad Debts proved bad but not recorded amounted to ₹ 2,000.
• Provision is to be maintained at 8% of Debtors.

Give necessary accounting entries for writing off the bad debts and creating the provision for doubtful debts account. Also show the necessary accounts.

Answer 1

Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
(i)	Bad Debt A/c  Dr.		2,000
	To Debtors A/c			2,000
	(Further bad debt charged from Debtors Account)
(ii)	Provision for Doubtful Debt A/c Dr.		8,000
	To Bad Debt A/c			8,000
	(Amount of bad debt transferred to Provision for Doubtful Debt Account)
(iii)	Profit and Loss A/c Dr.		7,840
	To Provision for Doubtful Debt A/c			7,840
	(Amount of Provision for Doubtful Debt transferred to Profit and Loss Account)

 

Dr.	Bad Debt Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2017				2017
Mar.31	Balance b/d		6,000	Mar.31	Provision for Doubtful Debt		8,000
Mar.31	Debtors		2,000
			8,000				8,000

 

Dr.	Debtors Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2017				2017
Mar.31	Balance b/d		50,000	Mar.31	Bad Debt		2,000
				Mar.31	Balance c/d		48,000
			50,000				50,000

 

Dr.	Provision for Doubtful Debts Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2017				2017
Mar.31	Bad Debt (6,000 + 2,000)		8,000	Apr.01	Balance b/d		4,000
Mar.31	Balance c/d		3,840	Mar.31	Profit and Loss		7,840
			11,840				11,840