Following is the extract of Balance Sheet:

Additional Information:

Provision for doubtful debt was to be made 5% on debtors.

The following entry to record the above adjustment is:

Provision for Doubtful Debts A/c Dr.   100
            To Revaluation A/c                           100

The correct answer is Option (3) -

Provision for Doubtful Debts A/c Dr.   100
            To Revaluation A/c                           100

Provision is to be made 5% which will be = 6000 x 5/100
                                                           = 300

Existing provision  = 400
Gain = 400- 100
        = 100

Gain will be credited to revaluation account.
So, journal entry will be- Provision for Doubtful Debts A/c Dr.  100 To Revaluation A/c  100