Journal Entry set 3

This illustration is about Bad Debt and depreciation and appreciation in the fixed assets.

1. Farhan closed his business due to heavy and paid only Rs. 400 to us in full settlement of his debet of Rs. 2000.

2. Dhruv who purchased goods of Rs. 3000 from us & paid earlier only Rs. 1200 is now untraceable.

3. Received Rs. 1600 from Farhan who’s A/c was written off last year as bad debt.

4. Depreciate machine @ 10% P.A. that had been purchased on 1^st Oct. for Rs.40000 Books are closed on 31^st December.

5. Appreciate land by Rs.25000.

6. Tools of Rs.15000 now revalued at Rs.10000 only.

Solutions : 👇👇

1. Cash A/c Dr. 400

Bed debts A/c Dr. 1600

To Farhan A/c Cr. 2000

2 Bed debts A/c Dr. 1800

To Dhruv’s A/c Cr. 1800

3 Cash A/c Dr. 1600

To Bed debts recoverd A/c Cr. 1600

4 Depreciation A/c Dr. 2500

To Machinery A/c Cr. 1000

5 Land A/c Dr. 25000

To Apprecition A/c Cr. 25000

6 Depreciation A/c Dr. 5000

To Tools & Implements A/c Cr. 5000