Year 1990
the Bad Debts Reserve appeared in the books of a firm at a figure of Rs.500
at the end the sundary debtors were 15000.
So 5% of 15000 is 750.
Means at the year end, dec 1990.. the bad debt reserve ko 500 se 750 tak leke aana hai. So entry ye bane gi
Dr profit and loss a/c 250
Cr bad debt reserve a/c 250
Ab bad debt reserve year end balance 750 hogaya.. jo next yea ka opening balance hoga.
Ab jan 1991
at the end the sundary debtors were 20000
so 5 % of 20000 is 1000
Means at the year end, dec 1991.. the bad debt reserve ko 750 se 1000 tak leke aana hai. So entry ye bane gi
Dr profit and loss a/c 250
Cr bad debt reserve a/c 250
Aur ab is year me 2.5% ka discount b hai so discount jo hai wo debtors me se bad debt reserve minus kar k phr nikalna hoga ..
Sundary debtors – bad debt reserve = amount * discount % = reserves for discount
20000 - 1000 = 19000 * 2.5% = 475
So entry is
Dr profit and loss a/c 475
Cr reserves for discount a/c 475
Jo ap k bold letters me words hain un k lie ye kahonga k
The bad debt reserves needed to be increased. This was because the provision was kept at 5%, but debtors had risen to 20000 (in year 1991) from 15000 (in year 1990). A provision of 1000( i.e. 5% of 20000). All that is now needed is a provision for extra 250.
Summary of entries..
Year 1990
1.
Dr profit and loss a/c 250
Cr bad debt reserve a/c 250
Year 1991
2.
Dr profit and loss a/c 250
Cr bad debt reserve a/c 250
3. entry for discount reserve.
Dr profit and loss a/c 475
Cr reserves for discount a/c 475.
Aur jo har saal me bad debts incure horahi hain na wo sedha profit and loss account me jaingi. Agr entry banani ho tou wo ye bani gi.
Dr. profit and loss a/c
Cr. Bad dets A/c.
agar koi galti ho tou seniors plz correct me.
regards..
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