Exam based problems and answers of PROVISIONS for BAD DEBTS are the BEST collection for sure shot success in the examination.
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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1
The following extracts information is provided from the book of A Trading Business:
Extracted Trial Balance on 31st December 2020
Particulars |
Amount Dr |
Amount Cr |
Sundry debtors |
100,000 |
− |
Bad debts |
3,000 |
− |
Provision for bad debts |
|
5,000 |
Additional information:
Provide 10% provision for doubtful debts account.
Required: Provision for doubtful debts account
[Answer: P&L account = Rs 8,000]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 2
The following extracts information is provided from A Trading Concern for the year ended 31st December:
Extracted Trial Balance on 31st December 2020
Particulars |
Amount Dr |
Amount Cr |
Trade debtors |
50,000 |
− |
Bad debts |
2,000 |
− |
Provision for bad debts |
|
4,000 |
Additional information:
Further bad debts amount is Rs 3,000.
Create 10% provision for doubtful debts.
Required: Provision for doubtful debts account
[Answer: P&L account = Rs 5,700]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 3
The following extracts are provided to you for the year ended:
Extracted Trial Balance on 31st December 2020
Particulars |
Amount Dr |
Amount Cr |
Customers |
2,00,000 |
− |
Bad debts |
5,000 |
− |
Provision for bad debts |
|
7,000 |
A Company has a policy to maintain a provision for bad debt at 5% of the debtor.
Make further bad debts Rs 10,000.
Required: Provision for doubtful debts account
[Answer: P&L account = Rs 17,500]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 4
The following extracts are for the year ended 31st December last year:
Extracted Trial Balance on 31st December 2020
Particulars |
Amount Dr |
Amount Cr |
Sundry debtors |
300,000 |
− |
Opening provision for bad debts |
− |
15,000 |
Bad debts |
6,000 |
|
Additional information:
Further bad debts are Rs 15,000.
Make a provision for doubtful debts at 4%.
Required: Provision for doubtful debts account
[Answer: P&L account = Rs 17,400]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 5
The following Extracted Trial Balance is given for the year ended 31st December 2020:
Particulars |
Debit Rs |
Credit Rs |
Sundry debtors |
52,000 |
|
Bad debts |
3,000 |
|
Provision for bad debts |
|
4,000 |
Additional information:
Bad debts for the current year are Rs 2,000.
Provision for bad debts @ 10% on debtors.
Discount on debtor is 2%
Required: Provision for bad debts account
[Answer: P&L account = Rs 6,900;
Discount = (52,000 ‒ 2,000 ‒ 5,000 PBD) @ 2% = Rs 900
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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 6
MK Kirana Pasal has following extracted balance:
Closing balance of debtors Rs 32,000
Bad debts written off during the year Rs 800
Opening provision for bad debts Rs 1,200
The provision of bad debts has been maintained at 5% of the debtors
Required: Provision for doubtful debts account
[Answer: P&L account = Rs 1,200]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 7
Following information are given
Opening provision for bad debts Rs 1,000
Bad debts written off during the year Rs 2,000
Closing balance of book debts Rs 50,000
The provision of bad debts has been maintained at 5% of the debtors
Required: Provision for bad debts account
[Answer: P&L account = Rs 3,500]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 8
Following particulars are provided:
On 1−1−2020: Provision for doubtful debts Rs 7,000.
On 1−1−2020: Bad debts Rs 10,000.
On 31−12−2020: Debtors Rs 150,000.
Bad debts during the year are Rs 9,000. Provision for bad debts is to be maintained @ 5% of debtors.
Required: Provision for doubtful debts account
[Answer: P&L account = Rs 19,050
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 9
on 1st April 2020, provision for bad and doubtful debts account showed a credit balance of Rs 7,000. Bad debts during the year were Rs 5,000. The debtors on 31st March 2021 were Rs 75,000. Provision for bad debts is required to maintain at 5% and discount allowed on debtors 2%.
Required: Provision for bad debts account
[Answer: P&L account = Rs 3,175; Discount = Rs 1,425]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 10
AK Traders has following extracted information:
Bills receivable balance was Rs 100,000.
Allowance for doubtful debts was Rs 2,000 (Cr).
Sales during the year were Rs 800,000 (80% on credit).
Rs 200,000 were collected during the year on-account of receivables.
The company has written-off Rs 5,000 as bad debts during the year.
Required: (a) Closing bills receivable
(b) Journal entries for sales, collections and bad debts write off during the year.
(c) Journal entry for bad debts maintained at 5% of credit sales.
(d) Show the amounts of bills receivable in the balance sheet.
[Answer: Closing bills receivable = Rs 535,000;
Bad debts = Rs 32,000;
Balance sheet amount = Rs 503,000]
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