Balance of Provision for Doubtful on 1st April, 2017.Rs Bad debts written off in the year ended 31st March, 2018. 3,000 Sundry Debtors after writing off bad debts.2,000 Bad debts after written off in the year ended 31st March, 2019.60,000 Sundry debtors before writing off bad debts.500 Maintain Provision for Doubtful debts at 5%.20,500 Prepare Bad Debts Account and Provision for Doubtful debts account .

Balance of Provision for Doubtful on 1st April, 2017.Rs Bad debts wri

1.	Balance of Provision for Doubtful on 1st April, 2017.Rs Bad debts written off in the year ended 31st March, 2018. 3,000 Sundry Debtors after writing off bad debts.2,000 Bad debts after written off in the year ended 31st March, 2019.60,000 Sundry debtors before writing off bad debts.500 Maintain Provision for Doubtful debts at 5%.20,500 Prepare Bad Debts Account and Provision for Doubtful debts account .
Answer» <html><body><p></p>Solution : <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/TSG_ACC_XI_C19_S01_010_S01.png" width="80%"/><br/> Notes : <br/> 1. For the <a href="https://interviewquestions.tuteehub.com/tag/year-1464599" style="font-weight:bold;" target="_blank" title="Click to know more about YEAR">YEAR</a> ended 31st March, 2018, <a href="https://interviewquestions.tuteehub.com/tag/balance-891682" style="font-weight:bold;" target="_blank" title="Click to know more about BALANCE">BALANCE</a> in the Provision for Doubtful Account (<a href="https://interviewquestions.tuteehub.com/tag/old-585313" style="font-weight:bold;" target="_blank" title="Click to know more about OLD">OLD</a> Provision - Rs 3,000) is less than the amount required to meet Bad Debts (Rs <a href="https://interviewquestions.tuteehub.com/tag/2-283658" style="font-weight:bold;" target="_blank" title="Click to know more about 2">2</a>,000) and New Provision (Rs 3,000), therefore, the short amount of Rs 2,000(i.e., `Rs 2,000 + Rs 3,000 - Rs 3,000`)is debited to Profit and Loss Account. <br/> 2. For the year ended 31st March, 2019, balance in the Provision for Doubtful Debts Account (Old Provision - Rs 3,000) is more than the amount required to meet Bad Debts (Rs 500) and New Prvision (Rs 1,000), therefore, the excess amount of Rs 1,500 is <a href="https://interviewquestions.tuteehub.com/tag/credited-7316860" style="font-weight:bold;" target="_blank" title="Click to know more about CREDITED">CREDITED</a> (written back) to Profit and Loss Account.</body></html>

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