Question : In the Balance sheet, Debtors exist at Rs.50,000 and Provision for Doubtful Debts at Rs.1,500. How much amount will
be realised from Debtors, if bad debts are Rs.10,000 and remaining debtors are realised at a discount of 5%.
Option 1: Rs.36,575
Option 2: Rs.36,500
Option 3: Rs.39,500
Option 4: Rs.38,000
Correct Answer: Rs.38,000
Solution : Explanation:
In Balance Sheet, Total Debtors is Seen in Assets Side as it is a Asset for us and Money will be receiving by us. So if we are Calculating the Realised value of debtors. There is a formula. The
Formula for Calculating the value is Total Debtors- Bad Debts- Discount (If given)
So Realised Debtors= Total Debtors- Bad Debts- Discount given to Debtors
Realised Debtors= 50000- 10000= 40000
How to Calculate Discount
Remaining Debtors * Given Percent
= 40000 * 5/100
= 2000
Realised Debtors= Remaining Debtors- Discount
= 40000-2000
= 38000
So Final Answer is 38000
No Treatment Done for Provision for Doubtdul debts as these are not yet bad.
Hence the correct answer is option 4.
