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Chapter 19 Adjustments in Financial Statements TS Grewal

About this chapter: While maintaining books of accounts there are various types of adjustments
that the Accountants have to do on regular basis to make sure the books are complete and
accurate. In Chapter 19 of TS Grewal these concepts of passing adjustment entries have been
explained in an easy to understand manner. there are very types of adjustments such as bad
debts, provision for doubtful debts, accrued income, and prepaid expenses etc which have to be
passed at the month end or end of the year to correctly adjust the books accounts. it is very
important for class 11 students to clearly understand the topics which have been explained in the
chapter as a lot of questions come in the exams relating to these topics. There are a lot of concepts
followed by the article and numerical questions which have been given in this chapter which the
students should practice on a regular basis. we have provided the solutions to all the questions in
the chapter and you can refer to the answers provided below, these have been prepared by the
accountancy teachers of class 11th.

Question.1 What is meant by Adjusting Entries?

Answer 1.

Adjusting Entries are the entries passed to record expenses and incomes that relate to the
accounting period but yet to be paid or recovered.

Question.2 Why is it necessary to pass adjusting entries when final accounts are prepared?

Answer 2.

It necessary to pass adjusting entries when final accounts are prepared, because Accrual Concept
is the fundamental accounting concept and requires that all expenses, whether paid or not, should
be accounted to ascertain correct profit or loss, assets and liabilities. They are recorded through the
adjustment entries.

Question.3 What are Outstanding Expenses? What is its adjusting entry?

Answer 3.

Outstanding Expenses mean the expenses incurred but not yet paid. At the end of the accounting
year such expenses is accounted in the books, otherwise profit will be overstated and liabilities will
be understated. Its adjusting entry is:

Expenses A/c Dr.

To Outstanding Expenses A/c

(Being particular expenses provided)

Question.4 What is meant by Prepaid Expenses? How are they adjusted in the Final Accounts?

Answer 4.

Prepaid Expenses are those expenses which we pay in this year, the benefit of which expenses
relates to next accounting year. Such part of the expenses is known as prepaid expenses or
unexpired expenses. The unexpired part such expenses is deducted from the total expenses in the
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Profit and Loss Account and prepaid expenses are shown as an asset in the Balance Sheet under
the head current assets.

Question.5 Define Accrued Income. What is its adjusting entry?

Answer 5.

Accrued Incomes or Outstanding Incomes are those incomes which have been earned during the
accounting period but have not been received till the end of accounting period. As per the Accrual
Concept of Accounting, total income of the period, both received and yet to be received, are shown
in the Final Accounts otherwise the profit and assets will remain under stated.

The adjusting entry for this purpose is:

Accrued Income A/c

To Income A/c (Amount of Particular Income)

To Output CGST A/c (Amount of CGST)

To Output SGST A/c (Amount of SGST)

(Being the particular accrued income accounted in the books)

Question.6 What is Unearned Income? How is it adjusted in the Final Accounts?

Answer 6.

Unearned Income or Income Received in Advance means an income that has not been earned but
is received in advance. At times an amount is received during a year in respect of an income that
relates partially or fully to the next year.

It is adjusted in the Final Accounts as given below:

1. In the credit side of Profit and Loss Account by deducting from the amount under that head of
income.

2. In the liabilities side of the Balance Sheet under the head current liabilities.

3. If income received in advance is shown in the trial Balance, it means that the adjusting entry is
already passed. It such a case, Income Received in Advance is shown in the Balance Sheet under
the head current liabilities.

Question.7 What is meant by Provision for Discount on Debtors?

Answer 7.

Customers are entitled to cash discount if they pay the due amount on time. The payment may be
received in next year, therefore the discount should also be allowed only in the next year. But, since
the book debts have arisen during the current year, discount to be allowed should be treated as an
expense of the current year. The process is the same as for the Provision for Doubtful Debts. The
expect amount of the discount to be allowed is debited to the Profit and Loss Account and credited
to the Provision for Discount on Debtors Account. The balance in the letter account is deducted from
book debts in the Balance Sheet and is carried forward to the next year. Actual discount allowed
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next year is debited to Provision for Discount on Debtors Account and not to the Profit and Loss
Account. The amount debited reduces balance in the Provision for Discount on Debtors Account, it is
made up to the required amount by a debit to Profit and Loss Account and credit to the Provision for
Discount on Debtors Account just like Provision for Doubtful Debts Account.

Question.8 Show the treatment of the following in final accounts when given inside the Trial
Balance:

(i) Provision for Discount on debtors

(ii) Closing stock

(iii) Commission Received in Advance.

Answer 8.

(i) If provision for discount on debtors is given in the Trial Balance, then it is shown in the credit side
of Profit and Loss Account. If new provision fordiscount on debtors is made in the current year, then it
is shown in thedebit side of the Profit and Loss Account and provision for discount ondebtors if given
in the Trial Balance at lesser value than the new provisionfor discount amount then it is deducted in
the debit side from newprovision and vice versa.

(ii) If closing stock is given in the Trial Balance, then it is shown in the assets side of Balance Sheet
under the head current assets.

(iii) If Commission received in Advance Account is given in the Trial Balance, then it is shown in the
liabilities side of Balance side under the head current liabilities.

Question.9 Ravi’s Trail Balance as on 31st March,2019 has the following information:

What is the amount of outstanding interest to be provided?

Answer 9.

The amount of outstanding interest to be provided

=Total Interest – Interest paid during the year

= Rs. 1,00,000 × 10/100 × 6/12 – Rs. 4,000

= Rs. 5,000 – Rs. 4,000

= Rs. 1,000

Question.10 Manish has paid salaries of Rs. 1,50,000 for the year ended 31st March, 2019. Salaries
include Rs. 20,000 paid in advance for the year ending 31st March. 2020. Show how it will be shown
in the Profit and Loss Account and the Balance Sheet.

Answer 10.
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Question.11 Rahul’s Trial Balance as on 31st March,2019 has the following information:

Additional information: (i) Salary for the month of March, 2019 is yet to be paid. (ii) Electricity Bill
for March,2019 amounted to Rs.5,200 was received on 2nd April,2019.

Answer 11.

Question.12 Ramesh’s Trail Balance as on 31st March, 2019 given the following information:

Show how the above items would appear in the Profit and Loss Account and Balance Sheet.

Answer 12.
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Question.13 Ramesh’s Trail Balance given the following information:

Depreciation is provided @ 10% p.a. on the fixed assets. Show how this will be shown in the Profit
and Loss Account.

Answer 13.

Question.14 Sanjiv’s Trial Balance as on 31st March, 2019 shows the following information:

Sanjiv took goods costing Rs.20,000 for his personal use but entry was not passed in the books of
account. Show the treatment in the Final Accounts.

Answer 14.
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Question.15 Following is the extract of Trail Balance as on 31st March,2019:

Adjustment: Create a Provision for Doubtful Debts @ 5% on Debtors. Pass necessary entry and
show these items in the Profit and Loss account and the Balance Sheet.

Answer 15.

Question.16 Sundry debtors in a Trail Balance are Rs. 90,000. Write off Rs. 5,000 as bad debts and
make a Provision for Doubtful Debts @ 10% on sundry debtors.

Pass necessary Journal entries.

Answer 16.
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Question.17 Arun is a trader. While preparing his final accounts on 31st March, 2018, he made a
provision for doubtful debts @ 4% of the sundry debtors amounting to Rs.42,000. During the year
ended 31st March,2019 doubtful debts amounted to Rs. 3,400. On 31st March,2019, Sundry debtors
were Rs. 56,500 and the provision for doubtful debts was maintained at the same rate.

Show the entries to record the above matters in Arun’s Ledger Accounts.

Answer 17.

Question.18 On 1st April, 2007, Shiv had a Provision for Doubtful Debts of Rs. 650. On 31st March,2018,
total debtors amounted to Rs. 18,400 out of which Rs. 400 were bad and had to be written off. It
was decided to maintain a Provision for Doubtful Debts at 5% of the debtors.

On 31st March,2019, debtors were Rs. 10,320 out of which Rs.320 had to be written off as bad debts.
Provision for Doubtful Debts is to be maintained at 5% of the Debtors.

Show the Bad Debts Account and Provision for Doubtful Debts Account for the years ended on
31st March, 2018 and 2019.

Answer 18.
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Question.19 The Trail Balance of Manish gives the following information:

It is decided to create a Provision for Doubtful Debts @ 10% on debtors and a Provision for
Discount @ 2% on debtors. Show how the adjustment will appear in the Final Accounts.

Answer 19.

Question 20. Aman started business with capital of Rs. 5,00,000 on 1st April, 2020. He introduced
additional capital of Rs. 3,00,000 on 1st October, 2020. He charged interest on capital @ 10% p.a.
Calculate the amount of interest on capital and shows it in final accounts.

Answer 20:
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Working Note:-

Calculation of Interest on Capital:-

Rs. 5,00,000 × 10/100 = Rs. 50,000
Rs. 3,00,000 × 10/100 × 6/12 = Rs. 15,000
Total Interest on Capital = Rs. 50,000 + Rs. 15,000
Total Interest on Capital = Rs. 65,000

Question 21. Raj allowed a commission of 10% of profits to his manager after charging
his commission. Net Profit amounted to Rs. 11,00,000 for the current year. Calculate
the amount of commission and show the relevant account while preparing final
accounts.
Answer 21:
Calculate the amount of commission:-
Manager’s Commission = Net Profit before commission × Rate/(100 + Rate )
Manager’s Commission = 11,00,000 × 10/(100+10)
Manager’s Commission = 11,00,000 × 10/110
Manager’s Commission = 1,00,000

Question 22. Moahn Lal’s Profit and Loss Account shows net profit of Rs. 1,76,000 before
charging commission of manager. Provide for manager’s commission at 10% on the
net profit after charging such commission.
Answer 22:
Calculate the amount of commission:-
Manager’s Commission = Net Profit before commission × Rate/(100 + Rate )
Manager’s Commission = 1,76,000 × 10/(100+10)
Manager’s Commission = 1,76,000 × 10/110
Manager’s Commission = 16,000

Question 23. Following extract is taken from the Trial Balance of Kabir as on 31st March, 2021:

A fire broke out on 31st March, 2021 and stock of value of Rs. 28,000 was destroyed. It was fully
insured and the insurance company admitted the claim in full. Show the treatment in final
accounts.
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Answer 23:

Question 24. Ramesh valued stock at the end of the year at Rs. 1,00,000. Goods costing Rs. 5,000
were destroyed by fire during the accounting period. Show the treatment if the goods are not
insured.

Answer 24:

Question 25. Following is the extract of Trial Balance as on 31st March, 2021:

Additional Information:

One installment of Loan from SBI of Rs. 40,000 was received on 1st January, 2021. Calculate the
amount of outstanding interest to be provided.

Answer 25:

Calculation of Interest on Loan:-

Interest on Loan = Rs. 1,20,000 × 8/100 × 6/12

Interest on Loan = Rs. 4,800

Interest on Loan = Rs. 1,60,000 × 8/100 × 3/12

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Interest on Loan = Rs. 3,200

Outstanding Interest on Loan = Rs. 8,000 – Rs. 6,000 = Rs. 2,000

Question.26 Give Journal entries for the following adjustments in final accounts:

(i) Salaries Rs. 5,000 are outstanding.

(ii) Insurance amounting to Rs.2,000 is paid in advance.

(iii) Rs. 4,000 for rent have been received in advance.

(iv) Commission earned but not received Rs. 1000.

(v) Interest on Capital Rs. 1,500.

(vi) Interest on Drawings Rs. 300.

(vii) Write off Rs. 2,000 as further debts.

(viii) Closing Stock Rs. 3,000.

Answer 26.

(i) Salaries Rs. 5,000 are outstanding.

Practical Problems:-
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Question 1. Following are the balances extracted from the books of Manish on 31st March, 2019:

Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2019 after
following adjustments are made:

(i) Closing Stock was Rs. 16,000.

(ii) Depreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.

(iii) Unpaid Rent amounted to Rs. 500.

Answer 1:
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Question 2: Prepare Trading and Profit and Loss Account and Balance Sheet from the following
balances, relating to the year ended 31st March, 2019:

Additional Information:
(i) Closing Stock was valued at Rs. 14,500.
(ii) Depreciate Plant and Machinery by Rs. 4,000.
(iii) Write off Bad Debts Rs. 5,000.
(iv) Rs. 400 is due for repairs.

Answer 2:
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Question 3: Following Trial Balance has been extracted from the books of Prasad on 31st March,
2019:

Additional Information:
(i) Outstanding salaries were Rs. 45,000.
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(ii) Depreciate Machinery at 10%.

(iii) Wages outstanding were Rs. 5,000.
(iv) Rent prepaid Rs. 10,000.
(v) Provide for interest on capital @ 5% per annum.
(vi) Stock on 31st March, 2019 Rs. 8,00,000.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance
Sheet as at that date.

Answer 3:

Question 4: From the following Trial Balance of Shradha as on 31st March, 2019, prepare Trading
and Profit and Loss Account and Balance Sheet:
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Adjustments:
(i) Closing Stock Rs. 64,000.
(ii) Wages outstanding Rs. 2,400.
(iii) Bad Debts Rs. 600.
(iv) Provision for Doubtful Debts to be 5%.
(v) Rent is paid for 11 months.
(vi) Insurance premium is paid per annum, ended 31st May, 2019.
(vii) Loan from the bank was taken on 1st October, 2018.
(viii) Provide Depreciation on machinery @ 10% and on Furniture @ 5%.

Answer 4:
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Question 5: Trial Balance of a business as at 31st March, 2019 is given below:

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Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance
Sheet as at that date after taking into account the following adjustments:
(i) Closing Stock was valued at Rs. 7,000.
(ii) Outstanding liabilities for wages were Rs. 600 and salaries Rs. 1,400.
(iii) Depreciation is to be provided @ 5% p.a. on fixed assets.
(iv) Included in Plant and Machinery is a machine purchased for Rs. 10,000 on 1st October, 2018.
(v) Insurance premium paid in advance Rs. 200.

Answer 5:
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Question 6: Following balances were extracted from the books of Vijay on 31st March, 2021:

Answer 6:
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Question 7: Following are the balances extracted from the books of Narain on 31st March, 2019:

Additional Information:
(i) Closing Stock as on 31st March, 2019 was Rs. 2,00,600, whereas its Net Realisable Value (Market
Value) was Rs. 2,05,000.
(ii) Depreciate: Business Premises by Rs.3,000 and Furniture and Fittings by Rs. 2,500.
(iii) Make a provision of 5% on debtors for doubtful debts.
(iv) Carry forward Rs. 2,000 for unexpired insurance.
(v) Outstanding salary was Rs. 15,000.
Prepare Trading and Profit and Loss Account for the year and Balance Sheet as at that date.

Answer 7:
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Question 8: Following balances are taken from the books of Niranjan. Prepare Trading and Profit
and Loss Account and Balance Sheet for the year ended 31st March, 2019:
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Adjustments:
(i) Closing Stock Rs. 7,50,000.
(ii) Depreciate Machinery by 10% and Furniture by 20%.
(iii) Wages Rs. 50,000 and salaries Rs. 20,000 are outstanding.
(iv) Write off Rs. 50,000 as further Bad Debts and create 5% Provision for Doubtful Debts. Also,
create a reserve for discount on Debtors @ 2%.
(v) Investments were made on 1st July, 2018 and no interest has been received so far.

Answer 8:
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Question 9: From the following Trial Balance of Mahesh, prepare his Final Accounts for the year
ended 31st March, 2019:
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Additional Information:
(i) Closing Stock on 31st March, 2019 was Rs. 21,000.
(ii) Rent of Rs. 1,200 has been received in advance.
(iii) Outstanding liability for Miscellaneous expenses Rs. 12,000.
(iv) Commission earned during the year but not received was Rs. 2,100.
(v) Goods costing Rs. 2,000 were taken by the proprietor for his personal use but entry was not
passed in the books of account.

Answer 9:
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Question 10: From the following Trial Balance and other information, prepare Trading and Profit
and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date:
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Stock on 31st March, 2019 was Rs.1,24,500. Rent was unpaid to the extent of Rs.850 and Rs.1,500
were outstanding for General Expenses; Rs.4,000 are to be written off as bad debts out of the
above debtors; and 5% is to be provided for doubtful debts. Depreciate Plant and Machinery by
10% and Premises by 2%.
Manager is entitled to a commission of 5% on net profit after charging his commission.

Answer 10:
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Question 11. From the following Trial balance of Shubho, Prepare Trading and Profit and Loss
Accounts for the year ended 31st March, 2021 and Balance Sheet as at that date:

The following adjustments be taken care of:

(i) Depreciate Land and Building @ 6%, Plant and Machinery @ 10%, Office equipment’s @ 20%
and Furniture and Fixtures @ 15%.

(ii) Calculate Provision for Doubtful Debts at 2% on Debtors.

(iii) Insurance premium includes Rs. 250 paid in advance.

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(iv) Provide salary to Banerjee Rs. 15,000 p.a.

(v) Outstanding Salaries Rs. 11,500.

(vi) 10% of the final profit is to be transferred to General Reserve.

Answer 11:
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Question 12. Prepare Trading and Profit and Loss Account for the year ending on 31st March, 2021
and Balance Sheet as on that date from the following balances of Trail Balance:

Adjustments:

1.) The value of stock on 31st March, 2021 Rs. 40,000.

2.) Provision for Doubtful Debts is to be maintained at 5% on Sundry Debtors.

3.) Change depreciation on both Furniture and Machinery @ 10% p.a.

4.) Machinery costing Rs. 20,000 was purchased on 1st January, 2021.

5.) Allow interest on capital @5% p.a.

6.) A fire occurred on 20th March, 2021 and stock of the value of Rs. 7,000 was destroyed. It was fully
insured and the insurance company admitted the claim in full.

7.) 10% of net profit to be carried to General Reserve.

Answer 12:
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Question 13. Following is the Trail Balance of M/s Indramani Jaiswal as on 31 st March, 2021:
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Prepare Trading and Profit and Loss Account for the year ending 31st March, 2021 and Balance
Sheet as on that date after making the following adjustments:-

(i) Value of Closing Stock Rs. 6,100.

(ii) Depreciate Machinery @ 10% p.a.

(iii) Create provision for doubtful debts at 5% on debtors.

(iv) Commission payable to manager at 10% on net profit.

(v) On 25th March, 2021, goods costing Rs. 1500 and furniture costing Rs. 3000 where destroyed by
fire, insurance company has accepted claims of Rs. 1000 for goods and Rs. 2000 for furniture.

Answer 13:
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Question 14. On 31st March, 2021 the following Trail Balance was prepared from the books of
Manpreet:
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Prepare Trading and Profit and Loss Account for the year ended 31st March, 2021 and also the
Balance Sheet as at that date after making the following adjustments:

(i) Closing Stock at cost was Rs. 35,000 whereas its net realisation value (market value) was Rs.
30,000.

(ii) A new machine was purchased for Rs. 3,000 on 1st April, 2020 but it was not paid for and no
entry was passed in the books.

(iii) Wages included Rs. 500 paid for the installation of machinery.

(iv) Provision for Doubtful Debts was raised to Rs. 1,400 and further bad debts of Rs. 300 were
written off.

(v) In the month of March, 2021, a fire broke out and destroyed stock to the value of Rs. 8,000. The
insurance company admitted claim for loss of stock of Rs. 5,000 only and the amount was paid in
April, 2021.

(vi) Outstanding wages were Rs. 700 while outstanding salaries were Rs. 500.

(vii) Prepaid insurance was Rs. 250 and prepaid advertisement Rs. 500.

(viii) Machinery was depreciated by 10% and furniture by 15%.

Answer 14:
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Question 15: Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and
Balance Sheet as at that date from the following Trial Balance:
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Adjustments:
(i) Taxes Rs. 3,000 are outstanding but Insurance Rs.500 is prepaid.
(ii) Commission Rs. 1,000 received in advance for the next year.
(iii) Interest Rs. 2,100 is to be received on Deposits and Interest on Bank Loan Rs. 3,000 is to be paid.
(iv) Provision for Doubtful Debts to be maintained at Rs. 10,000.
(v) Depreciate Furniture by 10%.
(vi) Stock on 31st March, 2019 is Rs. 45,000.
(vii) A fire occurred on 1st April, 2019 destroying goods costing Rs. 10,000. These goods were
purchased paying CGST and SGST @ 6% each.

Answer 15:
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Question 16. The following is the Trial Balance of Ashok as on 31st March, 2021:

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2021 and Balance Sheet
as on that date after making the following adjustments:
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(i) Salaries for the month of March, 2021 of Rs. 1,000 were unpaid which are to be provided. Balance
in the account included Rs. 800 paid in advance.

(ii) Insurance is prepaid to the extent of Rs. 2,000.

(iii) Depreciate Furniture by 10% on original cost and Building by 5%.

(iv) Stock of Rs. 1,500 was taken by Ashok for his personal use.

(v) Make a Provision for Doubtful Debts equal to 10% of Sundry Debtors.

Answer 16:

Point of Knowledge:-

1. Purchases (Adjusted) means opening stock and closing stock are already adjusted in purchases
and as such these two items are not shown in Trading Account. As closing stock appears in Trail
Balance, it is shown in the assets side of Balance Sheet Alone.

2. As prepaid rent and wages outstanding exist in the trial balance, adjustment entry for these items
are already passed. Therefore, these items will be shown in Balance Sheet only.
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Question 17. From the following Trial Balance and additional information of Bharat, a proprietor,
prepare Trading and Profit and Loss Account for the year ending 31st March, 2021 and the Balance
Sheet as at that date:

Additional Information:-

(i) Salaries outstanding for the month of March, 2021 is Rs. 7,000.

(ii) Prepaid Insurance is Rs. 900.

(iii) Depreciate Machinery @ 15% p.a.

(iv) Value of Closing Stock is Rs. 1,11,000.

(v) Bharat took goods of Rs. 2,000 for personal use which was not recorded (Ignore GST).

Answer 17:
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Question 18. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2021 and
Balance Sheet as at that date from the following Trail Balance:
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Additional Information:-

(i) Taxes Rs. 3,000 are outstanding but Insurance Rs. 500 is prepaid.

(ii) Commission Rs. 1,000 received in advance for the year.

(iii) Interest Rs. 2,100 is to Received on Deposits and Interest on Bank Loan Rs. 3,000 is to be paid.

(iv) Provision for Doubtful Debts to be maintained at Rs. 10,000.

(v) Depreciate Furniture by 10%.

(vi) The cost of Closing Stock as on 31st March, 2021 was Rs. 45,000 but its Net Realizable Value
(Market Value) was Rs. 50,000.

(vii) A fire occurred on 1st April, 2021 destroying goods costing Rs. 10,000. The Stock was fully
insured (Ignore GST).

Answer 18:
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Question 19. From the following Trial Balance of Ramesh, prepare Trading, Profit and Loss Account
for the year ending 31st March, 2019 and a Balance Sheet as on that date:
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Adjustments:
(i) Cost of stock on 31st March, 2019 was Rs. 37,000. However, its market value was Rs. 35,000.
(ii) Wages outstanding were Rs. 6,000 and salaries outstanding were Rs.5,000 on 31st March, 2019.
(iii) Depreciate Land and Building @ 2 %, Plant and Machinery @ 10% p.a. and Furniture @ 15% p.a.
(iv) Purchase includes purchase of machinery for Rs.10,000 on 1st October, 2018.
(v) Debtors include bad debts of Rs.2,000. Maintain a provision for doubtful debts @ 10% on
Debtors.

Answer 19:
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Point of Knowledge:-

1. Calculation of Depreciation:-
Depreciation = Cost of Machinery × Percentage of Depreciation
= Rs. 2,05,000 × 10%
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= Rs. 20,500
Depreciation = Cost of Machinery × Percentage of Depreciation
= Rs. 10,000 × 10% × 6/12
= Rs. 500
Total Depreciation on Machinery = Rs. 20,500 + Rs. 500
Value of Machinery after Depreciation = Rs. 2,15,000 – Rs. 21,000
= Rs. 1,94,000
2. Calculation of Depreciation:-
Depreciation = Cost of Furniture × Percentage of Depreciation
= Rs. 55,000 × 15%
= Rs. 8,250
Value of Furniture after Depreciation = Rs. 55,000 – Rs. 8,250
= Rs. 46,750
3. Calculation of Depreciation:-
Depreciation = Cost of land & Building × Percentage of Depreciation
= Rs. 98,000 × 12%
= Rs. 2,450
Value of land & Building after Depreciation = Rs. 98,000 – Rs. 2,450
= Rs. 95,550
4. Calculation of Current Debtors = Debtors – Bad Debts – Provision for Bad Debts
= Rs. 50,000 – Rs. 2,000 – Rs. 4,800 (Rs. 48,000 × 10%)
= Rs. 43,200