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Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will be
- a)Rs. 1,045
- b)Rs. 2,750
- c)Rs. 1,100
- d)Rs. 2,760
Correct answer is option 'B'. Can you explain this answer?
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Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts ar...
To calculate the provision for doubtful debts, we first need to subtract the bad debts from the total debtors. Then, we can calculate the provision for doubtful debts based on the given percentage.
Step 1: Calculate net debtors
Total debtors on 31st March 2016: Rs. 55,200
Bad debts: Rs. 200
Net Debtors = Total Debtors - Bad Debts
Net Debtors = Rs. 55,200 - Rs. 200
Net Debtors = Rs. 55,000
Step 2: Calculate provision for doubtful debts
Provision for doubtful debts = Net Debtors x Percentage of Provision for Doubtful Debts
Provision for doubtful debts = Rs. 55,000 x 5%
Provision for doubtful debts = Rs. 2,750
So, the amount of provision for doubtful debts is Rs. 2,750. The correct answer is (b) Rs. 2,750.
Step 1: Calculate net debtors
Total debtors on 31st March 2016: Rs. 55,200
Bad debts: Rs. 200
Net Debtors = Total Debtors - Bad Debts
Net Debtors = Rs. 55,200 - Rs. 200
Net Debtors = Rs. 55,000
Step 2: Calculate provision for doubtful debts
Provision for doubtful debts = Net Debtors x Percentage of Provision for Doubtful Debts
Provision for doubtful debts = Rs. 55,000 x 5%
Provision for doubtful debts = Rs. 2,750
So, the amount of provision for doubtful debts is Rs. 2,750. The correct answer is (b) Rs. 2,750.
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Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts ar...
Understanding Sundry Debtors and Provisions
Sundry debtors represent the amount owed to a business by its customers. In this case, the sundry debtors amount to Rs. 55,200. It is essential to make provisions for bad debts and discounts to reflect the true financial position.
Calculating Provision for Doubtful Debts
1. Bad Debts:
- Further bad debts to be considered: Rs. 200
- This amount is deducted from the total sundry debtors.
2. Net Sundry Debtors:
- Adjusting the bad debts:
Rs. 55,200 - Rs. 200 = Rs. 55,000
3. Provision for Doubtful Debts:
- Rate: 5% of Rs. 55,000
- Calculation:
(5/100) * 55,000 = Rs. 2,750
Calculating Provision for Discount on Debtors
1. Provision for Discount:
- Rate: 2% of Rs. 55,000
- Calculation:
(2/100) * 55,000 = Rs. 1,100
Total Provisions
- The total provision for doubtful debts is Rs. 2,750.
- The provision for discounts (Rs. 1,100) is not included in the bad debts provision but is essential for financial reporting.
Conclusion
The correct answer for the provision for doubtful debts is:
Option B: Rs. 2,750.
This amount accurately reflects the potential loss from non-collection of debts, ensuring the financial statements present a true and fair view of the business's financial health.
Sundry debtors represent the amount owed to a business by its customers. In this case, the sundry debtors amount to Rs. 55,200. It is essential to make provisions for bad debts and discounts to reflect the true financial position.
Calculating Provision for Doubtful Debts
1. Bad Debts:
- Further bad debts to be considered: Rs. 200
- This amount is deducted from the total sundry debtors.
2. Net Sundry Debtors:
- Adjusting the bad debts:
Rs. 55,200 - Rs. 200 = Rs. 55,000
3. Provision for Doubtful Debts:
- Rate: 5% of Rs. 55,000
- Calculation:
(5/100) * 55,000 = Rs. 2,750
Calculating Provision for Discount on Debtors
1. Provision for Discount:
- Rate: 2% of Rs. 55,000
- Calculation:
(2/100) * 55,000 = Rs. 1,100
Total Provisions
- The total provision for doubtful debts is Rs. 2,750.
- The provision for discounts (Rs. 1,100) is not included in the bad debts provision but is essential for financial reporting.
Conclusion
The correct answer for the provision for doubtful debts is:
Option B: Rs. 2,750.
This amount accurately reflects the potential loss from non-collection of debts, ensuring the financial statements present a true and fair view of the business's financial health.
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Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer?
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Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer?.
Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer?.
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ample number of questions to practice Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs. 200. Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will bea)Rs. 1,045b)Rs. 2,750c)Rs. 1,100d)Rs. 2,760Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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