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Old provision was ₹3500. After writing off ₹10000 bad debts from debtors of ₹90000, a 5 percent provision is required on the balance. What is the additional loss?

Answer and explanation

Correct answer: ₹10500

Bad debts ₹10000 are a loss and new provision is 5 percent of ₹80000 which is ₹4000. After adjusting old provision ₹3500, extra provision is ₹500 so total additional loss is ₹10500.

Related tags

Bad DebtsOld ProvisionAdditional LossAsset RevaluationReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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