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Question
Ravi, Mohan and Sohan were partners in a firm. On 31.3.2022, Mohan retired from the firm. On Mohan’s retirement, the balance sheet of the firm showed debtors at ₹ 1,95,000. It was decided to record unrecorded debtors of ₹ 5,000 and create a provision of 5% on debtors for bad and doubtful debts.
Pass necessary journal entries for the above transactions in the book of the firm on Mohan’s retirement.
Journal Entry
Solution
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| 31.03.2022 | Debtors A/c ...Dr. | 5,000 | - | |
| To Revaluation A/c | - | 5,000 | ||
| (Being to record unrecorded debtors) | ||||
| 31.03.2022 | Revaluation A/c ...Dr. | 10,000 | - | |
| To Provision for Doubtful Debts A/c | - | 10,000 | ||
| (Being to create provision for bad debts @ 5%) |
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