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Question
In the Balance Sheet Total Debtors appear at ₹ 50,000 and Provision for Doubtful Debts appear at ₹ 1,500. How much amount will be realised from Debtors, if bad debts amount to ₹ 10,000 and remaining debtors are realised at a discount of 5%.
Numerical
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Solution
Total Debtors = ₹ 50,000
Provision for Doubtful Debts = ₹ 1,500 (already deducted in Balance Sheet)
Bad Debts = ₹ 10,000
Remaining Debtors realized at 5% discount
Debtors after bad debts = ₹ 50,000 – ₹ 10,000
= ₹ 40,000
5% of ₹ 40,000 = ₹ 2,000
Net Realisation = ₹ 40,000 – ₹ 2,000
= ₹ 38,000
The amount realised from Debtors = ₹ 38,000
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