On dissolution of a firm, debtors were ₹17,000. Out of these ₹500 became bad and the rest realised 60%. Which account will be debited and by how much amount on realisation?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Cash Account by ₹9,900.
Debtors = 17,000
Bad debts = 500
Remaining debtors = 17,000 - 500
= 16,500
Amount realised from debtors will be 60%
So, realised amount = 16,500 x 60/100
= 9,900
The journal entry for this-
Cash A/c Dr. 9,900
To Realisation A/c 9,900