Question

Prepare the bad debts account, provision for bad debts account, profit and loss account and balance sheet from the followii information as on December, 31, 2011.
(Rs.)
Debtors 80,000
Bad Debts 2,000
Provision for bad debts 5,000
Adjustments
Bad debts Rs. 500, Provision on debtors @ 3%.

Answer 1

Dr Bad Debts Account Cr

Date	Particulars	JF	Amt. (Rs)	Date	Particulars	JF	Amt. (Rs)
2011 Dec31	To Balance b/d		2,000	2011 Dec 31	By Provision Bad Debts A/c		2,500
Dec 31	To Sundry Debtor's A/c		500
			2,500				2,500

Dr Provision For Bad Debts Account Cr

Date	Particulars	JF	Amt. (Rs)	Date	Particulars	JF	Amt. (Rs)
2011	To Bad Debts A/c		2,500	2011	By Balance b/d (Old Provision)		5,000
	To Profit and Loss A/c (b/f) To Balance c/d @ 3% on		115 79,500 2,385
			5,000				5,000

Balance Sheet

Date	Liabilities	JF	Amt. (Rs)	Date	Particulars	JF	Amt. (Rs)
					Debtors (-) Bad Debts		8,000 500
					(-) Provision for Bad Debts		2,385
							77,115

Dr Profit and Loss Cr

Particulars	Amt. (Rs)	Particulars	Amt. (Rs)
To Bad Debts (+) Further Bad Debts	2,000 500	By Old Provision for Doubtful Debts	5,000
(+) New Provision for Bad Debts	2,385 4,885
To Balancing Figure	115
	5,000		5,000