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As per trial balance on 31-03-2014
Provision for bad debts Rs.1000
Bad debts Rs. 2000
Sundry debtors Rs. 30,600
Additional Information:
Further Bad debts Rs. 600
Make provision for doubtful debts – 5%
Make provision for Discount on debtors – 2 %
Provision for discount on sundry debtors will be ____
  • a)
    612
  • b)
    600
  • c)
    570
  • d)
    560
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
As per trial balance on 31-03-2014Provision for bad debts Rs.1000Bad d...
Given:

Provision for bad debts Rs.1000
Bad debts Rs. 2000
Sundry debtors Rs. 30,600
Further Bad debts Rs. 600

To find: Provision for discount on sundry debtors

Calculation:

Step 1: Calculation of Provision for Doubtful Debts

Provision for Doubtful Debts = 5% of Sundry Debtors

= 5/100 * 30,600

= Rs. 1530

Step 2: Calculation of Net Sundry Debtors

Net Sundry Debtors = Sundry Debtors - Bad Debts - Further Bad Debts

= 30,600 - 2000 - 600

= Rs. 28,000

Step 3: Calculation of Provision for Discount on Sundry Debtors

Provision for Discount on Sundry Debtors = 2% of Net Sundry Debtors - Provision for Doubtful Debts

= 2/100 * 28,000 - 1530

= Rs. 570

Therefore, the provision for discount on sundry debtors will be Rs. 570.

Final Answer: Option (c) 570.
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Community Answer
As per trial balance on 31-03-2014Provision for bad debts Rs.1000Bad d...
Take sundry drs. 30600, further bad debts 600 will be deducted from 30600. 30600-600= 30000. calculate provision for doubtful debts 5% (i.e)30000*5%= 1500. reduce it from drs 30000-1500= 28500. calculate 2% provision discount on debtors from 28500. (i.e.) 28500*2%= 570. so the answer is (option C) 570
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As per trial balance on 31-03-2014Provision for bad debts Rs.1000Bad debts Rs. 2000Sundry debtors Rs. 30,600Additional Information:Further Bad debtsRs. 600Make provision for doubtful debts – 5%Make provision for Discount on debtors – 2 %Provision for discount on sundry debtors willbe ____a)612b)600c)570d)560Correct answer is option 'C'. Can you explain this answer?
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