Sumanta Das Gupta (Accountant) (310 Points)
22 December 2011Dear Friends,
Please help to clear my doubt regarding a problem in Company Final Accounts :
An Asset, Viz., Building has a debit balance of Rs. 75,000 and also a credit balance of Rs. 5000. What does the credit balance signify ?
The rate of depreciation is given as 2%. On what amount should the depreciation be calculated and how shall we present the whole thing in the Balance Sheet ?
Thanks & regards.
praveen
(Chartered Accountant)
(6971 Points)
Replied 22 December 2011
The credit balance hopefully is depreciation reserve created.
However, depreciation reserve need not be created for each and every asset seperately. If it is done no harm.
It must be caluclated on the WDV based on the Depreciation Schedule.
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Sumanta Das Gupta
(Accountant)
(310 Points)
Replied 22 December 2011
Thank you Sir.
Here is another question :
Given : Provision for Doubtful debts (opening) : Rs. 2000 (Credit Balance)
Bad Debts = Rs. 1000 (Debit Balance)
Debtors : Rs. 50,000
Additional Information : Provision for doubtful debt is to be adjusted to 5 % on amount of debtors.
Are the following disclosures correct as per Schedule VI Parts I & II ?
In the P & L A/c. :
On the debit side :
To Bad Debts Rs. 1000
To Provision for Doubtful Debts :
Provision Required (5% of Rs. 50,000) = Rs. 2500
Less : Already provided for = Rs. 2000
Short Provision now provided for Rs. 500
In the Balance Sheet :
Sundry Debtors Rs. 50,000
Less : Provision for doubtful debts Rs. 2,500
Net Debtors Rs. 47,500
Please clarify.
Thanks once again & regards.
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