Question

An extract of Trial balance from the books of Tahiliani and Sons Enterprises on Marc 31 2017 is given below:

Name of the Account	Debit Amount Rs	Credit Amount Rs
Sundry debtors	50,000
Bad debts	6,000
Provision for doubtful debts		4,000

Additional Information:

• Bad Debts proved bad; however, not recorded amounted to Rs 2,000.
• Provision is to be maintained at 8% of debtors

Give necessary accounting entries for writing off the bad debts and creating the provision for doubtful debts account. Also, show the necessary accounts.

Answer 1

Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bad Debt A/c		Dr.		2,000
		To Debtors A/c				2,000
	(Further bad debt charged from Debtors Account)
	Provision for Doubtful Debt A/c		Dr.		8,000
		To Bad Debt A/c				8,000
	(Amount of bad debt transferred to Provision for Doubtful Debt Account)
	Profit and Loss A/c		Dr.		7,840
		To Provision for Doubtful Debt A/c				7,840
	(Amount of Provision for Doubtful Debt transferred to Profit and Loss Account)

Bad Debt Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017				2017
Mar.31	Balance b/d		6,000	Mar.31	Provision for Doubtful
Mar.31	Debtors		2,000		Debt		8,000
			8,000				8,000

Debtors Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017				2017
Mar.31	Balance b/d		50,000	Mar.31	Bad Debt		2,000
				Mar.31	Balance c/d		48,000
			50,000				50,000

Provision for Doubtful Debts Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017				2017
31 Mar.	Bad Debt (6,000 + 2,000)		8,000	Apr.01	Balance b/d		4,000
31 Mar.	Balance c/d		3,840	Mar.31	Profit and Loss		7,840
			11,840				11,840