Question

On the disSolution of a partnership firm there were debtors of \rupee 34,000. Debtors of \rupee 1,000 became bad and 60\% was realized from the remaining debtors. Which account will be debited and by how much amount on the realisation from debtors?

• A. Realisation A/c by \rupee 33,000
• B. Profit & Loss A/c by \rupee 1,000
• C. Cash A/c by \rupee 19,800
• D. Debtors A/c by \rupee 14,200

Hint:

Always deduct bad debts first and then calculate the realization amount as a percentage of the remaining debtors.

Answer 1

The Correct Option is C

Step 1: Calculate realizable amount:
Good debtors = \rupee 34,000 - \rupee 1,000 = \rupee 33,000
Amount realized = 60\% of \rupee 33,000 = \rupee 19,800
Step 2: Entry for realization:
Cash A/c is debited with the realizable amount of \rupee 19,800.