Question

Luv and Kush were partners in a firm sharing profits and losses in the ratio of 5 : 4. On 1^st April. 2024, Rishi was admitted as a new partner for `2/9`th share in profits which he acquired equally from Luv and Kush. On the date of Rishi’s admission, the Balance Sheet of Luv and Kush showed debtors of ₹ 9,00,000 and provision for bad and doubtful debts of ₹ 90,000. Pass necessary journal entries for treatment of provision for bad and doubtful debts on the date of Rishi's admission in each of the following cases:

1. Bad debts amounted to ₹ 60,000.
2. Bad debts amounted to ₹ 90,000.
3. Bad debts amounted to ₹ 1,00,000.

Answer 1

Journal
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
2024 April-1
(i)	Bad Debts A/c    ...Dr.		60,000	-
	To Debtors A/c		-	60,000
	(Being Bad debts irrecoverable reduced from Debtors)
	Provision for Bad and Doubtful Debts A/c    ...Dr.		60,000	-
	To Bad Debts A/c		-	60,000
	(Being Bad Debts adjusted from provision)
(ii)	Bad Debts A/c    ...Dr.		90,000	-
	To Debtors A/c		-	90,000
	(Being bad debts irrecoverable reduced from Debtor)
	Provision for Bad and Doubtful Debts A/c    ...Dr.		90,000	-
	To Bad Debts A/c		-	90,000
	(Being bad debts adjusted from provision)
(iii)	Bad Debts A/c    ...Dr.		1,00,000	-
	To Debtors A/c		-	1,00,000
	(Being bad debts irrecoverable reduced from Debtors)
	Provision for Bad and Doubtful Debts A/c    ...Dr.		90,000	-
	Revaluation A/c    ...Dr.		10,000	-
	To Bad Debts A/c		-	1,00,000
	(Being after adjusting bad debts with provision, short fall debited to Revaluation Account)
	Luv’s Capital A/c    ...Dr.		5,556	-
	Kush’s Capital A/c    ...Dr.		4,444	-
	To Revaluation A/c		-	10,000
	(Being loss on revaluation distributed in old ratio)