Company final accounts

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Dear Friends,

Please help to clear my doubt regarding a problem in Company Final Accounts :

An Asset, Viz., Building has a debit balance of Rs. 75,000 and also a credit balance of Rs. 5000. What does the credit balance signify ?

The rate of depreciation is given as 2%. On what amount should the depreciation be calculated and how shall we present the whole thing in the Balance Sheet ?

 

Thanks & regards.

Replies (2)

The credit balance hopefully is depreciation reserve created. 

However, depreciation reserve need not be created for each and every asset seperately. If it is done no harm.

It must be caluclated on the WDV based on the Depreciation Schedule.

 

You can download the rates for the below link

/share_files/depreciation-rates-in-xl-24461.asp

Thank you Sir.

Here is another question :

Given : Provision for Doubtful debts (opening) : Rs. 2000 (Credit Balance)

Bad Debts = Rs. 1000 (Debit Balance)

Debtors : Rs. 50,000

Additional Information : Provision for doubtful debt is to be adjusted to 5 % on amount of debtors.

Are the following disclosures correct as per Schedule VI Parts I & II ?

In the P & L A/c. :

On the debit side :

To Bad Debts                                                                                              Rs. 1000

To Provision for Doubtful Debts :

Provision Required (5% of Rs. 50,000) = Rs. 2500

Less : Already provided for                       = Rs. 2000

Short Provision now provided for                                                           Rs.    500

 

In the Balance Sheet :

Sundry Debtors                                               Rs. 50,000

Less : Provision for doubtful debts              Rs.  2,500

Net   Debtors                                                                                               Rs. 47,500

 

Please clarify.

 

Thanks once again & regards.

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