On Dissolution of a firm, debtors were ₹17,000 of these ₹500 become bad and rest realised at 60%. Which account will be debited and with how much amount?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) - Cash A/c by ₹9,900.
Debtors = ₹17,000
Bad debts = ₹500
Remaining debtors = 17,000 -500
= ₹16,500
Remaining debtors of ₹16,500 realised at 60%.
Realised amount = 16,500 x 60/100
= ₹9,900
Journal entry for the realisation amount-
Cash A/c Dr. ₹9,900
To Realisation A/c ₹9,900
So, cash account is debited with 9,900.