Provisions | Provision for Doubtful Debts | Exam Based Problems

 

 

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 31^st 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 31^st December:

Extracted Trial Balance on 31^st 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 31^st 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 31^st December last year:

Extracted Trial Balance on 31^st 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 31^st 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 1^st 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 31^st 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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