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Old Friday, April 22, 2011
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Post 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
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Old Saturday, April 23, 2011
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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)
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Old Saturday, April 23, 2011
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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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Old Saturday, April 23, 2011
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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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Old Sunday, August 07, 2011
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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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