Question

The following information are extract from the Trial Balance of M/s Nisha traders on 31 March 2017.

Sundry Debtors	₹ 80,500
Bad debts	₹ 1,000
Provision for bad debts	₹ 5,000
Additional Information
Bad Debts	₹ 500

Provision is to be maintained at 2% of Debtors.
Prepare bad debts account, Provision for bad debts account and profit and loss account.

Answer 1

Dr.	Bad Debt Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2017				2017
Mar.31	Balance b/d		1,000	Mar.31	Provision for Bad Debts		1,500
Mar.31	Debtors		500
			1,500				1,500

 

Dr.	Provision for Bad debt Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2017				2017
Mar.31	Bad Debt		1,500	Mar.31	Balance b/d		5,000
Mar.31	Profit and Loss		1,900
Mar.31	Balance c/d		1,600
			5,000				5,000

 

Dr.	Profit and Loss Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
				2017
				Mar.31	Provision for Bad Debts		1,900