Question

Sundry debtors given in the Trial Balance are Rs. 20000. Further bad debts amounted to Rs. 1000 and it is desired to create a provision of $5\%$ on debtors for doubtful debts and $2\%$ for discount. Sundry Debtors will appear in the Balance Sheet at a figure of________.

• A. Rs. 18620
• B. Rs 18600
• C. Rs. 17689
• D. Rs. 17670

Answer 1

Answer: (C)

Rs. 17689

Balance of debtors in Balance sheet :-

= Opening balance - bad debts - Provision for doubtful debts and discount

= 20,000 - 1000 - 950(WN 1) - 361(WN 2)

= Rs-17,689.

Working notes:-

1) Provision for doubtful debts :-

= 19,000 x 5/100

= Rs-950.

2) Provision for discount on debtors :-

= (19,000 - 950) 18,050 x 2/100

= Rs-361.