Question

Ravi, Mohan and Sohan were partners in a firm. On 31.3.2022, Mohan retired from the firm. On Mohan’s retirement, the balance sheet of the firm showed debtors at ₹ 1,95,000. It was decided to record unrecorded debtors of ₹ 5,000 and create a provision of 5% on debtors for bad and doubtful debts.

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

Answer 1

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
31.03.2022	Debtors A/c   ...Dr.		5,000	-
	To Revaluation A/c		-	5,000
	(Being to record unrecorded debtors)
31.03.2022	Revaluation A/c   ...Dr.		10,000	-
	To Provision for Doubtful Debts A/c		-	10,000
	(Being to create provision for bad debts @ 5%)