Question

Debtors appearing in the Balance Sheet of a firm were as follows: 

On dissolution of firm, bad debts were ₹40,000 and the remaining debtors were realised at 5% discount. How much amount was realised from Debtors?

Hint:

On dissolution, bad debts are first deducted from total debtors, and discount is applied on the balance realised.

Answer 1

Total Sundry Debtors = ₹4,00,000 Less: Bad Debts = ₹40,000 \[ \text{Remaining Debtors} = 4,00,000 - 40,000 = 3,60,000 \] Debtors were realised at 5% discount, i.e., 95% of remaining debtors: \[ \text{Amount Realised} = 3,60,000 \times \frac{95}{100} = ₹3,42,000 \]