In the Balance Sheet Total Debtors appear at Rs60,000 and Provision for Doubtful Debts appear at Rs1,500. How much amount will be realised from Debtors, if bad debts amount to Rs20,000 and remaining debtors are realised at a discount of 10%?

₹36000

The correct answer is option 1- ₹36,000.

Debtors = ₹60,000
Bad debts = 20,000
Remaining debtors = 60,000 - 20,000
                            = 40,000

This amount of ₹40,000 debtors is realised at  10% discount.

Discount = 40,000 x 10/100
             = 4,000

Realised value of debtors = Debtors value(Remaining) - discount
                                     = 40,000 - 4,000
                                     = 36,000

* NOTE- The provision for doubtful debts is an estimate of the amount of debtors that may not be collected. When debtors are realised and bad debts are specifically given, then there is no use of provision.