An abstract of the Trial Balance as on 31st December 2022 is as follows : Sundry debtors ₹ 60,000, Bad debts ₹

Question 20 of 22

Q. An abstract of the Trial Balance as on 31st December 2022 is as follows : Sundry debtors ₹ 60,000, Bad debts ₹ 1,500 Adjustment : Create a provision for Bad and Doubtful debts @ 5% on Sundry debtors. Show how these items will appear in Final accounts.

Puducherry TnboardTamil Nadu HSC First Year (DGE) Commerce Board 2025Subjective· 3mImportance★★★★★

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Charge bad debts ₹1,500 + new 5% provision ₹3,000 = ₹4,500 to P&L; show debtors ₹60,000 − ₹3,000 = ₹57,000 in Balance Sheet.

Step 1 — New provision for bad and doubtful debts

Provision = 5% of Sundry debtors = 5% × ₹60,000 = ₹3,000.

Step 2 — Profit and Loss Account (extract) for the year ended 31 Dec 2022

Dr — Particulars	₹	₹
To Bad debts	1,500
To Provision for bad and doubtful debts (new)	3,000	4,500

Step 3 — Balance Sheet (extract) as on 31 Dec 2022

| Assets | ₹ | ₹ |

| --- | --- | --- | …

Q.An abstract of the Trial Balance as on 31st December 2022 is as follows :
Sundry debtors ₹ 60,000, Bad debts ₹ 1,500
Adjustment : Create a provision for Bad and Doubtful debts @ 5% on Sundry debtors. Show how these items will appear in Final accounts.