Subjective Questions
Q1:
Following particulars are provided:
Opening provision for bad debts Rs.10,000
Bad debts Rs.8,000
Closing provision for bad debts Rs.9,000
Required: Provision for bad debts account
Type: Short
Difficulty: Easy
Show/Hide Answer
Answer: <p>Solution:</p> <table><tbody><tr><td width="266"> <p>Dr.</p> </td> <td width="493"> <p>Provision for bad debts a/c</p> </td> <td width="39"> <p>Cr.</p> </td> </tr></tbody></table><p></p> <table><tbody><tr><td width="294"> <p>Particulars</p> </td> <td width="105"> <p>Amt (in Rs.)</p> </td> <td width="293"> <p>Particulars</p> </td> <td width="107"> <p>Amt (in Rs.)</p> </td> </tr><tr><td width="294"> <p>To bad debts</p> </td> <td width="105"> <p>8,000</p> </td> <td width="293"> <p>By balance b/d</p> </td> <td width="107"> <p>10,000</p> </td> </tr><tr><td width="294"> <p>To balance c/d</p> </td> <td width="105"> <p>9,000</p> </td> <td width="293"> <p>By Profit and loss a/c</p> </td> <td width="107"> <p>7,000</p> </td> </tr><tr><td rowspan="2" width="294"> <p></p> </td> <td width="105"> <p>17,000</p> </td> <td rowspan="2" width="293"> <p></p> </td> <td width="107"> <p>17,000</p> </td> </tr><tr><td width="105"> <p></p> </td> <td width="107"> <p></p> </td> </tr></tbody></table>
Q2:
Following information are given:
Opening provision for bad debts Rs.1,000.
Bad debts written off during the year Rs.2,000.
Closing balance of debtors Rs.50,000.
The provision for bad debts has been maintained at 5% of the debtors.
Required: Provision for bad debts a/c
Type: Short
Difficulty: Easy
Show/Hide Answer
Answer: <p>Solution:</p> <table><tbody><tr><td width="266"> <p>Dr.</p> </td> <td width="493"> <p>Provision for bad debts a/c</p> </td> <td width="39"> <p>Cr.</p> </td> </tr></tbody></table><p></p> <table><tbody><tr><td width="294"> <p>Particulars</p> </td> <td width="105"> <p>Amt (in Rs.)</p> </td> <td width="293"> <p>Particulars</p> </td> <td width="107"> <p>Amt (in Rs.)</p> </td> </tr><tr><td width="294"> <p>To bad debts</p> </td> <td width="105"> <p>8,000</p> </td> <td width="293"> <p>By balance b/d</p> </td> <td width="107"> <p>10,000</p> </td> </tr><tr><td width="294"> <p>To balance c/d</p> </td> <td width="105"> <p>9,000</p> </td> <td width="293"> <p>By Profit and loss a/c</p> </td> <td width="107"> <p>7,000</p> </td> </tr><tr><td width="294"> <p>(5% of Rs.50,000)</p> </td> <td width="105"> <p></p> </td> <td width="293"> <p>(balancing figure)</p> </td> <td width="107"> <p></p> </td> </tr><tr><td rowspan="2" width="294"> <p></p> </td> <td width="105"> <p>17,000</p> </td> <td rowspan="2" width="293"> <p></p> </td> <td width="107"> <p>17,000</p> </td> </tr><tr><td width="105"> <p></p> </td> <td width="107"> <p></p> </td> </tr></tbody></table>
Q3:
A company has a policy to maintain a provision for bad debts at 5% of the debtors. The following extracts are provided to you for the year ended December 31st 2014.
|
Debit Amt (Rs.)
|
Credit Amt (Rs.)
|
Trade debtors
|
2,00,000
|
|
Bad debts
|
5,000
|
|
Opening provision for bad debt
|
|
7,000
|
Required: Provision for bad debts
Type: Short
Difficulty: Easy
Show/Hide Answer
Answer: <p>Solution:</p> <table><tbody><tr><td width="266"> <p>Dr.</p> </td> <td width="493"> <p>Provision for bad debts a/c</p> </td> <td width="39"> <p>Cr.</p> </td> </tr></tbody></table><p></p> <table><tbody><tr><td width="107"> <p>Date</p> </td> <td width="199"> <p>Particulars</p> </td> <td width="84"> <p>Amt (in Rs.)</p> </td> <td width="108"> <p>Date</p> </td> <td width="217"> <p>Particulars</p> </td> <td width="84"> <p>Amt (in Rs.)</p> </td> </tr><tr><td width="107"> <p>31-12-2014</p> </td> <td width="199"> <p>To bad debts</p> </td> <td width="84"> <p>5,000</p> </td> <td width="108"> <p>31-12-2014</p> </td> <td width="217"> <p>By balance b/d</p> </td> <td width="84"> <p>7,000</p> </td> </tr><tr><td width="107"> <p></p> </td> <td width="199"> <p>To balance c/d</p> </td> <td width="84"> <p>10,000</p> </td> <td width="108"> <p></p> </td> <td width="217"> <p>By Profit and loss a/c</p> </td> <td width="84"> <p>8,000</p> </td> </tr><tr><td rowspan="2" width="107"> <p></p> </td> <td rowspan="2" width="199"> <p></p> </td> <td width="84"> <p>15,000</p> </td> <td rowspan="2" width="108"> <p></p> </td> <td rowspan="2" width="217"> <p></p> </td> <td width="84"> <p>15,000</p> </td> </tr><tr><td width="84"> <p></p> </td> <td width="84"> <p></p> </td> </tr></tbody></table>
Q4:
Following information are provided to you:
Closing balance of debtors Rs.32,000
Bad debts written off during the year Rs.800
Opening provision for bad debts Rs.1,200
The provision of bad debts has been maintained at 5% of the debtors.
Required: Provision for doubtful debts account
Type: Short
Difficulty: Easy
Show/Hide Answer
Answer: <p>Solution:</p> <table><tbody><tr><td width="266"> <p>Dr.</p> </td> <td width="493"> <p>Provision for bad debts a/c</p> </td> <td width="39"> <p>Cr.</p> </td> </tr></tbody></table><p></p> <table><tbody><tr><td width="294"> <p>Particulars</p> </td> <td width="105"> <p>Amt (in Rs.)</p> </td> <td width="293"> <p>Particulars</p> </td> <td width="107"> <p>Amt (in Rs.)</p> </td> </tr><tr><td width="294"> <p>To bad debts</p> </td> <td width="105"> <p>800</p> </td> <td width="293"> <p>By balance b/d</p> </td> <td width="107"> <p>1,200</p> </td> </tr><tr><td width="294"> <p>To balance c/d</p> </td> <td width="105"> <p>1,600</p> </td> <td width="293"> <p>By Profit and loss a/c</p> </td> <td width="107"> <p>1,200</p> </td> </tr><tr><td width="294"> <p>(5% of Rs.50,000)</p> </td> <td width="105"> <p></p> </td> <td width="293"> <p>(balancing figure)</p> </td> <td width="107"> <p></p> </td> </tr><tr><td rowspan="2" width="294"> <p></p> </td> <td width="105"> <p>2,400</p> </td> <td rowspan="2" width="293"> <p></p> </td> <td width="107"> <p></p> </td> </tr><tr><td width="105"> <p></p> </td> <td width="107"> <p></p> </td> </tr></tbody></table>
Q5:
The following information are supplied to you:
Opening balance of provision for doubtful debts a/c Rs.14,000
Bad debts written off during the year Rs.5,000
Sundry debtors at the close of the year Rs.15,000
Provision for doubtful debts is required @ 5% on sundry debtors.
Required:
Provision for doubtful debts a/c
Effect on profit and loss a/c and balance sheet
Type: Short
Difficulty: Easy
Show/Hide Answer
Answer: <p>Solution:</p> <table><tbody><tr><td width="266"> <p>Dr.</p> </td> <td width="493"> <p>Provision for bad debts a/c</p> </td> <td width="39"> <p>Cr.</p> </td> </tr></tbody></table><p></p> <table><tbody><tr><td width="294"> <p>Particulars</p> </td> <td width="105"> <p>Amt (in Rs.)</p> </td> <td width="293"> <p>Particulars</p> </td> <td width="107"> <p>Amt (in Rs.)</p> </td> </tr><tr><td width="294"> <p>To bad debts</p> </td> <td width="105"> <p>5,000</p> </td> <td width="293"> <p>By balance b/d</p> </td> <td width="107"> <p>14,000</p> </td> </tr><tr><td width="294"> <p>To Profit and loss a/c</p> </td> <td width="105"> <p>8,250</p> </td> <td width="293"> <p></p> </td> <td width="107"> <p></p> </td> </tr><tr><td width="294"> <p>To balance c/d</p> </td> <td width="105"> <p>750</p> </td> <td width="293"> <p></p> </td> <td width="107"> <p></p> </td> </tr><tr><td rowspan="2" width="294"> <p></p> </td> <td width="105"> <p>14,000</p> </td> <td rowspan="2" width="293"> <p></p> </td> <td width="107"> <p>14,000</p> </td> </tr><tr><td width="105"> <p></p> </td> <td width="107"> <p></p> </td> </tr></tbody></table><p></p> <table><tbody><tr><td width="266"> <p>Dr.</p> </td> <td width="493"> <p>Profit and loss a/c</p> </td> <td width="39"> <p>Cr.</p> </td> </tr></tbody></table><p></p> <table><tbody><tr><td width="212"> <p>Particulars</p> </td> <td width="105"> <p>Amt (in Rs.)</p> </td> <td width="295"> <p>Particulars</p> </td> <td width="91"> <p></p> </td> <td width="96"> <p>Amt (in Rs.)</p> </td> </tr><tr><td width="212"> <p></p> </td> <td width="105"> <p></p> </td> <td width="295"> <p>By old provision for doubtful debts</p> </td> <td width="91"> <p>14,000</p> </td> <td width="96"> <p></p> </td> </tr><tr><td width="212"> <p></p> </td> <td width="105"> <p></p> </td> <td width="295"> <p>Less: Bad debts</p> </td> <td width="91"> <p>5,000</p> </td> <td width="96"> <p></p> </td> </tr><tr><td width="212"> <p></p> </td> <td width="105"> <p></p> </td> <td width="295"> <p></p> </td> <td width="91"> <p>9,000</p> </td> <td width="96"> <p></p> </td> </tr><tr><td width="212"> <p></p> </td> <td width="105"> <p></p> </td> <td width="295"> <p>Less: New provision for doubtful debts</p> </td> <td width="91"> <p>750</p> </td> <td width="96"> <p>8,250</p> </td> </tr></tbody></table><p></p> <p>Balance Sheet</p> <table><tbody><tr><td width="227"> <p>Liabilities</p> </td> <td width="98"> <p>Amt (in Rs.)</p> </td> <td width="285"> <p>Assets</p> </td> <td width="92"> <p></p> </td> <td width="97"> <p>Amt (in Rs.)</p> </td> </tr><tr><td width="227"> <p></p> </td> <td width="98"> <p></p> </td> <td width="285"> <p>Sundry debtors</p> </td> <td width="92"> <p>15,000</p> </td> <td width="97"> <p></p> </td> </tr><tr><td width="227"> <p></p> </td> <td width="98"> <p></p> </td> <td width="285"> <p>Less: Provision for doubtful debts</p> </td> <td width="92"> <p>750</p> </td> <td width="97"> <p>15,750</p> </td> </tr></tbody></table>