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#1
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Please check this adjustment
Bad debts=1250
Provision for bad debts=2000 Debtors=38000 Adjustment Write off a further sum of Rs.1000 as bad debt and provision for bad debts to be made equal to 10% of debtors My answer Allowance for bad debts A/C Debit Write off Rs.1000 Bad debt exp b/d Rs.1250 Bal c/d(38000810%) Rs.3800 Credit Balance b/d Rs.2000 Bad debt exp(Bal figure) Rs.4050 Bad debts expense in Income Statement will be Rs.4050 Allowance for bad debts in Balance Sheet will be Rs.3800 Kindly correct me if i am making some mistake |
#2
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Its answer will be as follows:
Allowance for bad debts a/c Debit side: Amount written off-------------------------------------------1000 Closing balance----------------------------------------------4800 Total-----------------------------------------------5800 Credit side: Opening balance---------------------------------------------2000 Provision for BD @10% of debtors i-e 10% of 38000------------3800 Total-----------------------------------------------5800 Income statement will show Rs.5050(1250+3800) B/sheet will show all for BD Rs.4800 |
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xavier (Saturday, April 23, 2011) |
#3
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Balance Sheet figure is doubtful, i think it must be 3800(Closing amount of debtors 38000*10%).
Income Statement figure is correct i have done it again
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#4
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You know that closing balances of ledgers are posted into financial stats(income stat and b/sheet). I have done the same;I posted closing balance of the ledger,titled Allowance for bad debts A/c,into B/sheet. Thus Rs.4800.
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xavier (Sunday, April 24, 2011) |
#5
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Hi Dear
The total bad debts expenses in Income Statement will be 1000 + 1250 = 2250 and provision for bad debts is as follows.: 38000- 1000 bad debts = 37000 x 10% = 3700 3700- 2000 old provisions = 1700 so total bad debts expenses for Income statement will be 1700+2250 = 3950 while in Balance sheet: Debtors 38000 less: bad -1000 less: provision -3700 total debtors 33300
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