C's Trial Balance contains the following information: Bad debts Rs. 8,000, Provision for Doubtful debts Rs. 6,000, Sundry debtors Rs. 25,000.It is desired to create a provision for bad debts at 10% on Sundry debtors at the end of the year. Sundry debtors (after provision) will appear in Balance Sheet at a figure of :

Rs.22,500

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Rs.21,000

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Rs.18,000

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Rs.15,500

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Solution

The correct option is B Rs.22,500
Sundry debtors after provision = Sundry debtors before provision - Provision
= 25,000 - 10% of 25,000
= RS-22,500.

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Additonal Information:

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2. Provision is to be maintained at 8 % of Debtors.

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

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The correct option is B Rs.22,500Sundry debtors after provision = Sundry debtors before provision - Provision = 25,000 - 10% of 25,000 = RS-22,500.

The correct option is B Rs.22,500
Sundry debtors after provision = Sundry debtors before provision - Provision
= 25,000 - 10% of 25,000
= RS-22,500.