Question

The following balances appeared in the trial balance of M/s Kapil Traders as March 31, 2012.

Rs

Sundry debtors 30,500

Bad debts 500

Provision for bad debts 2,000

The partners of the firm agreed to records the following adjustments

in the books of the Firm. Further bad debts Rs 300. Maintain

provision for bad debts 10$\%$. Show the following adjustments in

the bad debts account, provision account, debtors account, profit

and loss account and balance sheet.

Answer 1

Dr Bad Debts Account Cr

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt.Rs}& \text{Date}& \text{Particulars}& \text{JF}& \text{Amt.(Rs)}\\ 2012& & & & 2012& & & \\ \text{Mar}31& \text{To Balance b/d}& & 500& \text{Mar}31& \text{By Provision for}& & \\ & & & & & \text{Bad Debts A/c}& & 800\\ \text{Mar}31& \text{To Sundry}& & & & & & \\ & \text{Debtor's A/c}& & & & & & \\ & & & 300& & & & \\ & & & \overline{\underset{–}{\underset{–}{800}}}& & & & \overline{\underset{–}{\underset{–}{800}}}\end{array}$

Dr Provision for Bad Debts Account Cr

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt.Rs}& \text{Date}& \text{Particulars}& \text{JF}& \text{Amt.(Rs)}\\ 2012& & & & 2012& & & \\ \text{Mar}3& \text{To Bad Debts A/c}& & 800& \text{Apr}1& \text{By Balance b/d}& & 2,000\\ & & & & & \text{By Profit and Loss A/c}& & 1,820\\ \text{Mar}31& \text{To Balance c/d}& & & & & & \\ & \text{New Provision}& & & & & & \\ & & & 3,020& & & & \\ & & & \overline{\underset{–}{\underset{–}{3,820}}}& & & & \overline{\underset{–}{\underset{–}{3,820}}}\end{array}$

Dr Debtor's Account Cr

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt.Rs}& \text{Date}& \text{Particulars}& \text{JF}& \text{Amt.(Rs)}\\ 2012& & & & 2012& & & \\ \text{Mar 31}& \text{To Balance b/d}& & 30,500& \text{Mar}31& \text{By Further Bad}& & \\ & & & & & \text{Debts A/c}& & 300\\ & & & & \text{Mar 31}& \text{By Provision for}& & \\ & & & & & \text{Bad Debts A/c}& & 3,020\\ & & & & \text{Mar 31}& \text{By Balance c/d}& & 27,180\\ & & & \overline{\underset{–}{\underset{–}{30,500}}}& & & & \overline{\underset{–}{\underset{–}{30,500}}}\end{array}$

Dr Profit and Loss Account Cr

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt.Rs}& \text{Date}& \text{Particulars}& \text{JF}& \text{Amt.(Rs)}\\ & \text{To Bad debts}& & & & & & \\ & A/c500& & & & & & \\ & (+)\text{Further}& & & & & & \\ & \text{Bad Debts}\underset{–}{300}& & 800& & & & \\ & \text{To Provision for}& & & & & & \\ & \text{Bad Debts}& & & & & & \\ & \text{New}3,020& & & & & & \\ & \text{Old}\underset{–}{2,000}& & \underset{–}{1,020}& & & & \\ & & & 1,820& & & & \end{array}$

Balance Sheet

$\begin{array}{cccc}\text{Liabilities}& \text{Amt. (Rs)}& \text{Assets}& \text{Amt. (Rs)}\\ & & \text{Sundry Debtors}30,500& \\ & & (-)\text{Bad Debts}300& \\ & & \overline{30,200}& \\ & & (-)\text{(Provision(New))}\underset{–}{3,020}& 27,180\end{array}$