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Question

A Trial Balance contains the following information :

Bad debtsRs.5,000
Discount allowedRs.4,000
Provision for discount on debtorsRs.2,000
Provision for Doubtful DebtsRs.5,000
Sundry DebtorsRs.50,000
At the end of the year, it is desired to maintain a provision for debts at Rs. 4,000 and provision for discount on debtors at Rs.2,000. Sundry Debtors (after provision) will appear in the Balance Sheet at a figure of :

A
Rs.44,000
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B
Rs.38,000
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C
Rs.44,700
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D
Rs.32,300
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Solution

The correct option is A Rs.44,000
Balance of debtors after provision = Balance before provision - Provision
= 50,000 - ( 4,000 + 2,000 )
= RS-44,000.

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