Question

Divya, Mona and Sonu were partners in a firm. On 31.3.2026 Mona retired from the firm. On Mona’s retirement the balance sheet of the firm showed debtors at ₹ 1,95,000 and Provision for Doubtful Debts at ₹ 11,700. It was decided to record unrecorded debtors of ₹ 5,000 and to maintain a provision for bad and doubtful debts at existing rate.

Pass necessary journal entries for the above transactions in the books of the firm on Mona’s retirement.

Answer 1

JOURNAL OF DIVYA, MONA, AND SONU
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
2026 March 31	Debtors A/c Dr.		5,000
	To Revaluation A/c			5,000
	(Recorded the unrecorded debtors)
”	Revaluation A/c Dr.		300
	To Provision for Bad and Doubtful Debts A/c$^{(2)}$			300
	(Created provision for bad and doubtful debts)

Working Note:

(1) Existing rate of Provision for Doubtful Debts \[= \frac{11,700}{1,95,000} \times 100 = 6\%\]

(2) Provision for Doubtful Debts to be created:

Particulars	₹
Required balance @ 6% on $(₹ 1,95,000 + ₹ 5,000)$ =	12,000
Less: Existing balance =	11,700
Provision to be created	300