Following Balances were extracted from the books of Vijay on 31st March, 2019: Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date after giving effect to the following adjustments: (i) Stock as on 31st March, 2019 was valued at Rs 2,30,000. (ii) Write off further Rs 1,800 as Bad Debts and maintain the Provision for Doubtful Debts at 5%. (iii) Depreciate Machinery at 10%. (iv) Provide Rs 7,000 as outstanding interest on loan.

Following Balances were extracted from the books of Vijay on 31st Marc

1.	Following Balances were extracted from the books of Vijay on 31st March, 2019: Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date after giving effect to the following adjustments: (i) Stock as on 31st March, 2019 was valued at Rs 2,30,000. (ii) Write off further Rs 1,800 as Bad Debts and maintain the Provision for Doubtful Debts at 5%. (iii) Depreciate Machinery at 10%. (iv) Provide Rs 7,000 as outstanding interest on loan.
Answer» Solution :Percentage of PROVISION for Doubtful Debts is CALCULATED after DEDUCTING further Bad Debts from Debtors at 5% of RS 61,000 (i.e., Rs 62,800- Rs 1,800).

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