Final accounts

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umesh (Querist)
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30 August 2013 In a concern, the opening provision of doubtful debts is 51000. During the year a sum of 10000 was written off as bad debts . The closing balance of sundry debtors amounts to 630000. It was decided that 10% of the debtors is to maintained as provision . Calculate the closing balance towards the provision for doubtful debts and pass journal entry for the given effect of provision maintained ???

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 August 2013 Provision for Doubtful Debts - 51,000
Less: Bad debts during the year - 10,000
Balance - 41,000

Closing balance of debtors - 630000
Closing balance required on provision for doubtful debts - 6,30,000*10% = 63,000

Current balance on provision for doubtful debts = Rs. 41,000

Additional provision required = 63000 -41000 = 22000

Entry:

P&L A/c Dr 22,000
To Provision for Doubtful Debts 22,000

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