On 01-01-2007, the provision for doubtful debts a/c stood at Rs.12,000 (credit balance). In 2007, the bad debts amounted to Rs.10,000. The debtors on 31-12-2007 are amounted to Rs. 3, 20,000 anda provision for doubtful debt to be maintained @ 10%.
Required:
Show Journal entries and necessary accounts. Also show how theitems will appear in Profit and Loss account and Balance sheet.