निम्न जानकारी दिइएका छन् (Following informations are provided): सुरुको शंकास्पद जगेडा आसामी (Provision for Baddebts) Rs. 10,000 नउठ्ने आसामी (Baddebts) Rs. 5,000 आसामी (Debtors) Rs. 60,000 शंकास्पद…

Provision for Doubtful Debts Account

Working Notes:

1. Given Data:

   • Opening Provision for Doubtful Debts = Rs. 10,000
   • Bad Debts (Unrecoverable Debts) = Rs. 5,000
   • Total Debtors = Rs. 60,000
   • Provision Rate = 10% of Debtors

2. Calculation of Required Provision:

   • Required Provision = 10% of Rs. 60,000
   • Required Provision = Rs. 6,000

3. Adjustment of Provision:

   • Since the existing provision (Rs. 10,000) is higher than the required provision (Rs. 6,000), the excess provision must be reversed.
   • However, the question states that the provision is to be created at 10%, implying the existing provision is to be adjusted to the required amount.
   • Bad Debts (Unrecoverable Debts) of Rs. 5,000 are written off against the existing provision, reducing it to Rs. 5,000.
   • The remaining provision (Rs. 5,000) is adjusted to the required provision (Rs. 6,000) by adding Rs. 1,000 to the provision account.

4. Final Adjustment:

   • Since the existing provision after writing off bad debts is Rs. 5,000, and the required provision is Rs. 6,000, an additional provision of Rs. 1,000 is required.
   • However, the question implies that the provision is to be created at 10% of debtors, and the existing provision is adjusted accordingly.
   • The Provision for Doubtful Debts Account is adjusted to reflect the new provision of Rs. 6,000, but the existing provision is Rs. 10,000, and Rs. 5,000 is written off as bad debts, leaving Rs. 5,000.
   • Therefore, the Provision for Doubtful Debts Account is closed with a balance of Rs. 5,000, and the required provision of Rs. 6,000 is created by transferring Rs. 1,000 to the provision account.

Corrected Provision for Doubtful Debts Account:

Explanation:

1. Opening Balance: Rs. 10,000 (given)
2. Bad Debts Written Off: Rs. 5,000 (debit side)
3. New Provision Required: Rs. 6,000 (10% of Rs. 60,000)
4. Adjustment:
   • The existing provision after writing off bad debts is Rs. 5,000.
   • To achieve the required provision of Rs. 6,000, an additional Rs. 1,000 is added to the provision account.
   • Therefore, the Provision for Doubtful Debts Account is credited with Rs. 11,000 (Rs. 10,000 opening balance + Rs. 1,000 additional provision).
   • The Balance c/d is Rs. 6,000, which is the required provision for the next period.

Final Answer:

The Provision for Doubtful Debts Account is prepared as follows:

Note: The above account reflects the adjustment of the provision to the required 10% of debtors after writing off bad debts. The Balance c/d of Rs. 6,000 represents the new provision for doubtful debts.