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Shailesh Bros. providing you following information on 31st March 2015. Show the treatment of following items in related accounts without doing calculation of profit and loss:

 

Particulars

Amount

Rs. 

Amount

Rs. 

Debtors

51,000

---

Bad debts

1,500

----

Provision for doubtful debts

----

800

Prepaid salaries

300

 

Outstanding Rent

 

400

Commission receieved

 

6,000

 

Additional information:

a. Further bad debts were Rs. 1,000.

b. Bad debts recovered Rs.600

c. Make provision of doubtful debts @5%

Commission received includes 1/3 for the next year.

Asked by Topperlearning User 4th July 2016, 8:16 AM
Answered by Expert
Answer:

 Profit and Loss Account (Extract)

Dr.

 

Cr.

Particulars

 

Amount

Rs. 

Particulars

 

Amount

Rs. 

To Bad debts 

1.500

 

By Bad debts recovered

 

600

Add: Further Bad Debt

1,000

 

By Commission 

6,000

 

 

 

2,500

 

Less: 1/3rd Received in advance 

 

2,000

 

4,000

Add: Provision of doubtful debts @5% (new)

 

2500

 

 

 

 

 

5,000

 

 

 

 

Less: Provision for doubtful debt (old)

 

800

 

4,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet (Extract)

Liabilities

 

Amount

Rs. 

Assets

 

Amount

Rs. 

Commission Received in Advance

 

 

2,000

Debtors 

51,000

 

Outstanding Rent

 

400

Less: Further Bad debts 

1,000

 

 

 

 

 

50,000

 

 

 

 

Less: Provision of Doubtful debts @5% (50,000 * 5%)

 

 

2,500

 

 

47,500

 

 

 

Cash (Bad debts recovered)

 

600

 

 

 

Prepaid Salaries

 

300

 

Answered by Expert 4th July 2016, 10:16 AM
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