Question

Pooja and Meher are partners in a firm. They admit Rati into the firm on the following terms:

1. Unrecorded Debtors of ₹ 1,000 to be brought into the books.
2. Provision for doubtful debts to be created @ 5% on Debtors.

The recorded debtors in the Balance Sheet of Pooja and Meher on the date of Rati's admission were ₹ 25,000.

What will be the net debtors to be shown in the Balance Sheet of the reconstituted firm?

Answer 1

Recorded debtors in the Balance Sheet of Pooja and Meher on the date of admission of Rati into the firm is:

	(₹)
Recorded Debtors	25,000
Add: Unrecorded debtors	1,000
	26,000
Less: Provision for doubtful debts (26,000 × 5%)	(1,300)
Net amount of debtors to be shown in Balance Sheet of reconstituted firm.	24,700